Australian shares flat as rate-sensitive sectors drag, inflation data in focus

Australian shares were little changed on Tuesday, as strong gains in mining stocks countered losses in most other sectors as caution prevailed ahead of key inflation data.

The S&P/ASX 200 index was down 0.03% at 8,726.10, as of 1152 GMT, after closing nearly unchanged on Monday.

Market players await the monthly consumer price data for November, due on Wednesday, to gauge monetary policy direction. Persistently high inflation and the central bank’s increasingly hawkish commentary have prompted markets to price in a 39% chance of an interest rate hike as soon as February.

Inflation in November was forecast to have eased to 3.7% from 3.8% the month before, while the trimmed mean measure of core inflation was expected to have remained above the central bank’s 2%-3% target range.

Rate-sensitive financials fell 0.6%, with top lender Commonwealth Bank of Australia losing 0.7%.

The other three of the “Big Four” banks fell between 0.4% and 0.5%.

Consumer staples and healthcare stocks retreated 0.8% and 0.4%, respectively.

Real estate stocks lost 0.4% and consumer discretionary fell 0.3%.

Miners jumped 1.2% to a record high, as restocking by Chinese steelmakers ahead of the Lunar New Year holiday boosted iron ore prices.

Mining heavyweights Rio Tinto and BHP rose 1.9% and 1.2%, respectively.

BlueScope Steel soared 20.2% to a more than 17-year high after the steelmaker received a A$13.15 billion ($8.83 billion) takeover proposal from industrial conglomerate SGH and US-based Steel Dynamics. SGH rose 4.7% to a more than two-month high.

Energy stocks inched up 0.1%, tracking overnight gains in crude oil prices as traders assessed the impact of Venezuela political turmoil on crude flows from the South American country.

Elsewhere, S&P 500 E-minis futures were down 0.03%, while Japan’s Nikkei was up 0.12%.

New Zealand’s benchmark S&P/NZX 50 index was nearly unchanged at 13,592.03.