Australian shares slump to two-month low as miners fall

By Keshav SinghChundawat

Sept 11 (Reuters) - Australian stocks ended Friday at a more than two-month low, as miners led by BHP lost on weaker commodity prices, while a surge in oil prices over the week heightened inflation concerns and kept investors on edge.

The benchmark S&P/ASX 200 index fell 0.9% to 8,741.20 points, its lowest closing level since July 2. It lost 2.1% in the week, its steepest drop since mid-March.

Global investors shunned risk assets on the day on fears that higher oil prices and persistent inflation fuelled by the Middle East war could prompt further policy tightening.

"It's no surprise to see the market in a steep 'risk-off' mode with investors retreating to cash and defensive assets until we see some stability in the macroeconomic outlook," said Luke Winchester, portfolio manager at Merewether Capital.

Heavyweight miners slumped 3.7%, their steepest drop since June 19, as copper fell after Reuters reported that the White House has yet to decide on refined copper tariffs amid officials' concerns that higher prices for the metal could raise manufacturing costs. [MET/L]

Major miner BHP slumped 4.1%, clocking its worst session since mid-June, while Rio Tinto shed 3.5%. Lithium miners Liontown and PLS tumbled 8.6% and 7.4%, respectively.

Oil prices eased but were still set for a weekly gain, holding above $100 a barrel on fears of prolonged supply disruptions. [O/R]

Over the week, hawkish signals from Reserve Bank of Australia governors, together with higher energy prices, increased expectations of further tightening.

Markets are currently pricing in 32 basis points of rate hikes by November and 39 bps for December.[0#AUDIRPR]

Yields on both short-term and long-term Australian government bonds jumped over the 5% mark to their highest levels since mid-2011 as a global bond selloff took hold.

Limiting losses, financials advanced 1.1%, clocking their best session in nearly two weeks, after three straight sessions of losses.

In New Zealand, benchmark S&P/NZX 50 index fell 1% to 13,580.33 points, its lowest closing level since late-June.

Investors are now awaiting the island nation's June-quarter GDP data to be released next week.

(Reporting by Keshav Singh Chundawat in Bengaluru; Editing by Harikrishnan Nair)