Australian stocks extended losses on Wednesday after data showed sharp cost pressures in the country in May, with financial and mining heavyweights leading the losses.
The S&P/ASX 200 index was down 1.1% at 7755.7 points at 0141 GMT. The benchmark index rose more than 1% on Tuesday.
Data showed Australia’s annual pace of consumer price inflation accelerated to a six-month high in May, as the core measure rose for the fourth straight month, leading markets to reduce the chances of another rate hike.
The country’s central bank said earlier in the day that it could not rule out further tightening, noting that monetary policy was restrictive and the current interest rate was causing financial hardship for many households.
Investors are also awaiting the U.S. Personal Consumption Expenditures (PCE) Price Index – the Federal Reserve’s preferred measure of inflation – due Friday, which could provide additional clues on the rate cut trajectory of the Fed.
In Sydney, interest rate-sensitive financial stocks fell 0.9%, with the big four banks falling between 0.5% and 0.9%.
Heavy mining stocks followed suit and fell 1.7% due to weak iron ore prices.
Shares of major miners BHP Group and Rio Tinto fell 1.5% and 1% respectively.
Gold stocks fell more than 2.0% to reach their lowest level since early April. Shares of Northern Star Resources and Evolution Mining fell 1.8% and 1.3%, respectively.
At the same time, energy stocks fell 0.6% on concerns about demand in the United States, the top oil consumer.
On the other hand, technology stocks rose 0.8% due to gains recorded on Wall Street.
Shares in Star Entertainment rose 3.2%, heading for their best day since the start of June, after the casino operator appointed Steve McCann as group CEO and managing director.
New Zealand’s benchmark S&P/NZX 50 index rose 0.2% to 11,742.35 points. (Reporting by John Biju in Bengaluru; Editing by Janane Venkatraman)
