The fall of heavy-hitting financials and materials sectors, which steadied the market earlier in the year, was behind June’s plummeting market value, said Active Quantitative Equities head of portfolio management Bruce Apted. “With rates moving higher there is now a greater risk of an economic slowdown, a softer housing market and lower loan growth, all of which has negative implications for the profitability of many financial companies, especially the banks.

“The materials sector is also looking less resilient as risks of softening global growth increase.”

On Thursday, Commonwealth Bank hiked mortgage rates by a hefty 1.4 per cent. The RBA is expected to make another rate rise at Tuesday’s meeting amid ballooning inflation and resilient consumer spending.

Wall Street recorded broad losses overnight after Federal Bank chairman Jerome Powell signalled the window for wrestling inflation was closing and acknowledged there was a mounting risk of rates hikes pushing the US into a recession. His warning echoed earlier comments from Reserve Bank Governor Philip Lowe.

Tweet of the day:

Quote of the day: ”There’s a clock running here. The risk is that because of the multiplicity of shocks you start to transition into a higher-inflation regime. Our job is literally to prevent that from happening, and we will prevent that from happening ... Is there a risk we would go too far? Certainly there’s a risk. The bigger mistake to make, let’s put it that way, would be to fail to restore price stability. ” US Federal Bank chairman Jerome Powell on the risk of rate rises causing a recession.

You may have missed: Canadian asset manager Brookfield has snapped up a 2.5 per cent stake in power giant AGL, fuelling speculation it may seek to revive a push to take over the company.

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