Banks, miners drag ASX lower at noon

ASX signboards in Sydney.
Heavyweight mining, energy and bank stocks were under pressure on Thursday. -AAP Image

Australian shares look set to close the quarter on a subdued note after trading lower midway through the session amid renewed fears of a global economic slowdown.

The benchmark S&P/ASX200 index was down 60.3 points, or 0.9 per cent, to 6,639.9 at 1200 AEST on Thursday, while the broader All Ordinaries was down 61.1 points, or 0.89 per cent, to 6,816.8.

Shares across the Asia-Pacific skidded after hawkish comments from US Federal Reserve chairman Jerome Powell revived fears of a sharp slowdown as central banks attempt to tame surging inflation.

Speaking at a European Central Bank conference overnight, Powell said there was a risk the US central bank's interest rate hikes would slow the economy too much, but the bigger risk was persistent inflation.

That prompted traders in the local market to sell down heavyweight mining, energy and financial stocks.

The energy sector was the top loser as oil prices eased about 2.0 per cent.

Sector leaders Woodside and Santos gave up 2.2 per cent and 0.9 per cent respectively, while Beach Energy and Whitehaven Coal slid more than 3.0 per cent each.

Lower iron ore prices and a weakening demand outlook proved to be a drag on the shares of the top miners. BHP, Rio Tinto and Fortescue Metals were down between 1.5 and 3.0 per cent.

Gold stocks took a further hit, with Newcrest and Regis Resources falling more than 2.0 per cent.

Each of the big four banks was trading more than 1.0 per cent lower as traders firmed up bets for a hefty rate hike by the Reserve Bank at its board meeting next week.

On the positive side, healthcare stocks saw some buying across the board, with Cochlear, Ansell and CSL rising about 1.0 per cent.

Shares in AGL Energy rose one per cent to $8.40 after the country's top power producer said a unit of Canadian investment manager Brookfield Asset Management had acquired a 2.6 per cent stake in the company on June 24. 

Meanwhile, the Australian dollar was barely changed, buying 68.80 US cents at 1200 AEST, from 68.82 US cents at Wednesday's close.