2 ASX 200 retail shares ravaged following US rate decision

Falling ASX retail share price represented by sad shopper sitting in mall.Falling ASX retail share price represented by sad shopper sitting in mall.

ASX 200 retail shares JB Hi-Fi Limited (ASX: JBH) and Harvey Norman Holdings Limited (ASX: HVN) had a rough end to the week.

JB Hi-Fi shares fell 4.36% on Friday, while Harvey Norman shares descended 4.66%. For perspective, the S&P/ASX 200 Index (ASX: XJO) slipped nearly 1.9% on Friday.

Let’s take a look at what may have impacted ASX 200 retail shares.

Interest rate rise

ASX 200 shares, including retail shares, struggled on Friday following grim news out of the United States. The US Federal Reserve lifted interest rates by 0.75%. More rate hikes are planned and there are fears of a recession.

Higher interest rates not only increase borrowing costs for companies, they can also dampen retail spending as consumers have less available cash.

The Reserve Bank of Australia often takes its lead from the US Federal Reserve. Commenting on the prospect of the RBA lifting rates in the Australian Financial Review, BetaShares chief economist David Bassanese said:

It now seems more likely than not that the RBA will lift rates by 0.5 per cent in October.

Meanwhile, AMP’s Shane Oliver is predicting retail sales will rise “just 0.1% in August” after lifting 1.3% in July, the publication reported.

Share price snapshot

The JB Hi-Fi share price has fallen nearly 16% in a year, while Harvey Norman shares have slipped nearly 19%.

For perspective, the ASX 200 has fallen nearly 11% in the past year.

The post 2 ASX 200 retail shares ravaged following US rate decision appeared first on The Motley Fool Australia.

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Motley Fool contributor Monica O’Shea has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Harvey Norman Holdings Ltd. The Motley Fool Australia has positions in and has recommended Harvey Norman Holdings Ltd. The Motley Fool Australia has recommended JB Hi-Fi Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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