Australian shares flat as miners offset banking, gold losses

Australian shares were little changed on Thursday as gains in mining stocks were countered by losses in gold miners and banks, while investors dialled back expectations of near-term policy easing after a hotter-than-expected domestic inflation report.

The S&P/ASX 200 index was flat at 8,764.40, as of 0022 GMT.

The benchmark ended 0.9% lower on Wednesday.

Miners were on the rise and advanced 1.4% after US-listed Freeport-McMoran declared force majeure at its Grasberg mining complex in Indonesia, sending copper prices to a 15-month peak overnight.

BHP and Rio Tinto gained 2% each, making them among the top gainers on the benchmark. Energy stocks added 0.4%, as oil prices climbed on a surprise drop in US crude inventories.

Sector majors Woodside Energy and Santos gained 1.1% and 0.3% respectively.

Data from the Australian Bureau of Statistics on Wednesday showed the monthly consumer price index rose 3.0% in August from a year earlier and up from 2.8% in July.

The data came in just above median forecasts of 2.9%, suggesting some upside to inflation that prompted markets to pare back the chances of imminent policy easing.

Swaps now indicate a 6.5% possibility of a quarter-point cash rate cut at the central bank’s meeting next week, with a 38.2% probability of a cut at its subsequent meeting in November.

Offsetting gains, heavily-weighted financials fell 0.2%, with top lender Commonwealth Bank of Australia declining 0.3%.

Lower interest rates typically aid the mortgage-paying capacity of borrowers, thus boosting lending volumes for banks. Gold miners lost 0.9% as bullion prices retreated from a record high overnight.

Index leaders Northern Star Resources and Evolution Mining lost 1.8% and 1.1% respectively. Healthcare stocks also slipped 0.8%, with biotech major CSL declining 0.7%.

In New Zealand, the benchmark S&P/NZX 50 index was unchanged at 13,175.32.