Australian shares fell on Wednesday in broad-based selling, as April inflation data came in stronger than expected and concerns that the US debt-ceiling deal could face a rocky path through Congress weighed on global investor sentiment. The S&P/ASX 200 index had shed 1% to 7,209.3 by 0146 GMT.
The benchmark closed 0.1% lower on Tuesday. Australian consumer prices rose by more than expected in April, driven by a jump in automotive fuel, suggesting sticky inflation would likely keep pressure on the central bank. Meanwhile, Reserve Bank of Australia Governor Philip Lowe said inflation expectations were well anchored for now, but that cannot be taken for granted and entrenched inflation would lead to higher interest rates and unemployment.
Australian shares edge down as financials weigh; US debt ceiling in focus
Globally, uncertainty prevailed about whether Congress will approve the bipartisan deal to raise the $31.4 trillion US debt ceiling after a handful of hard-right Republican lawmakers said they would oppose it. Energy stocks led losses on the benchmark Australian stock index with a 1.8% fall, after oil prices fell overnight as mixed messages from major producers clouded the supply outlook ahead of an OPEC+ meeting.
Sector majors Woodside Energy and Santos declined as much as 2.3% and 1.9%, respectively. Heavyweight mining stocks slipped 1.3%, with BHP Group and Rio Tinto shedding as much as 1.8% and 1.6%, respectively. Financial stocks edged 0.7% lower, with the so-called “big four” banks down between 0.4% and 1%.
Among individual stocks, Bank of Queensland Ltd lost 5.2% after it entered into separate undertakings with the country’s financial crime and prudential regulators to comply with anti-money laundering and counter-terrorism financing laws and address risk governance practices.
Paladin Energy was the biggest gainer on the benchmark index with an 11.2% jump, after it said it was not aware of any legislative changes in Namibia that would affect its ownership of Langer Heinrich mine in the southwest African country.
In New Zealand, the benchmark S&P/NZX 50 index rose 0.1% to 11,878.71.
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