Australian shares fall sharply in broad selloff; CBA slips on HY profit drop

Australian shares fell nearly 1.5% on Wednesday, led by gold and banking stocks in a broad-based selloff after hot US inflation data, while Commonwealth Bank of Australia slipped as the lender reported a drop in first-half cash earnings.

The S&P/ASX 200 index was down 1.4% at 7,500.70, as of 0026 GMT, extending its falls to a third session.

The Australian market followed Wall Street lower after data showed that US inflation rose more than expected in January, reinforcing expectations that the Federal Reserve will hold interest rates steady in March.

In Sydney, financials dropped 2.1% after a five-session rally.

Shares of CBA retreated as much as 3.8% to hit their lowest since Jan. 18.

Australia’s top lender warned that lagged effect of high interest rates would continue to exert financial strain on household and business customers in fiscal 2024.

For the six months ended Dec. 31, CBA’s cash profit fell to A$5.02 billion ($3.24 billion) from A$5.18 billion a year ago.

National Australia Bank and ANZ Group Holdings fell 2.1% and 1.9%, respectively.

Gold stocks slumped 3.9% in their biggest intraday drop since Oct. 9, after bullion prices hit a two-month low overnight as stronger-than-expected inflation data tempered prospects of an early interest rate cut in the US Heavyweight miners fell 1.8% in their biggest intraday drop since Nov. 14.

BHP Group, Rio Tinto and Fortescue dropped between 1% and 2.7%.

Australian shares end slightly lower; US inflation data on tap

Energy stocks retreated 1.5%, while the healthcare sector fell 1.2%.

Among gainers, AMP advanced as much as 11.9% in its biggest intraday gain since April 28, 2022, after the wealth manager posted a 6.5% rise in its fiscal 2023 underlying profit.

New Zealand’s benchmark S&P/NZX 50 index fell 1% to 11,621.44.

Fletcher Building declined as much as 16.4% and was headed for its worst session ever, after it swung to a half-year loss, hurt by a one-off provision for the construction of the New Zealand International Convention Centre.