(Bloomberg) -- Australian stocks dropped, closing in a technical correction after the Federal Reserve flagged it will start raising interest rates in March.
The benchmark S&P/ASX 200 Index slumped 1.8% on Thursday, taking its decline since its Aug. 13 record to more than 10%. The move comes a few days after New Zealand's equity gauge entered a correction. The two countries' bond yields surged as Fed Chair Jerome Powell didn't rule out hikes at every meeting.
The Fed's latest hawkish tilt comes as traders have been boosting bets that the Reserve Bank of Australia will lift rates earlier. Analysts expect the RBA will scrap quantitative easing at its Tuesday meeting.
READ: Australia's Hotter Inflation Fuels Bets on Earlier Rate Hike
A tumble in Australian bonds sent benchmark 10-year yields up as much as 12 basis points to 2.06%, the highest since October. The country's government bonds have lost 1.5% so far this month, set for the worst start to a year on record.
©2022 Bloomberg L.P.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
