Australian shares extended losses on Wednesday, after data showed strong cost pressures in the country in May, with heavyweight financial and mining stocks leading losses.
The S&P/ASX 200 index fell 1.1% to 7755.7 points by 0141 GMT.
The benchmark rose more than 1% on Tuesday. Data showed the annual pace of Australian consumer price inflation accelerated to a six-month high in May, while a key core measure rose for the fourth straight month, leading markets to narrow the odds on another rate hike.
The country’s central bank said earlier in the day that it could not rule out further tightening, noting that the monetary policy was restrictive with the current cash rate causing financial pain for many households.
Investors are also awaiting the US personal consumption expenditures (PCE) price index - the Federal Reserve’s favoured gauge of inflation - due on Friday, which could provide further clues on the Fed’s rate cut trajectory.
In Sydney, interest rate-sensitive financial stocks declined 0.9%, with the ‘big four’ banks falling between 0.5% and 0.9%.
Australian shares gain as financials hit record high; inflation data on tap
Heavyweight mining stocks followed suit declining 1.7% due to weak iron ore prices. Shares of top miners BHP Group and Rio Tinto fell 1.5% and 1%, respectively.
Gold stocks declined more than 2.0% to hit their lowest level since early April.
Shares of Northern Star Resources and Evolution Mining fell 1.8% and 1.3%, respectively.
Meanwhile, energy stocks retreated as much as 0.6% on demand concerns in the top oil consumer United States. In contrast, technology stocks advanced up to 0.8% tracking gains in Wall Street.
Shares of Star Entertainment rose as much as 3.2%, eyeing their best day since early June, after the casino operator appointed Steve McCann as its group CEO and Managing Director.
New Zealand’s benchmark S&P/NZX 50 index advanced 0.2% to 11,742.35 points.
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