Australian shares edge off early advances as January CPI data clips banking gains

Australian shares pared some early gains on Wednesday as banks and miners eased after hotter-than-expected January inflation, while grocer Woolworths rallied on beating half-year profit estimates.

The S&P/ASX 200 index was last up 0.7% at 9,090.80, as of 0039 GMT, after rising nearly 1% earlier in the session.

The benchmark stayed on course to snap three straight sessions of losses.

Official data showed the January consumer price index (CPI) rose 0.4%, as housing and health costs picked up, while core inflation rose at the fastest annual pace since late 2024, adding to the risk of another interest rate hike.

Market swaps after the CPI data imply a nearly 78% probability of a hold at 3.85% from the Reserve Bank of Australia on its key interest rate, when it meets in March.

Rate-sensitive financials briefly trimmed gains after the data before rebounding to a 0.8% rise.

All the “big four” banks were up between 0.5% and 1.2%. Mining stocks were last up 1.7%, slightly paring early gains on record copper prices.

Mining giants BHP and Rio Tinto rose 1.8% and 1.5% each.

Fortescue’s gains were capped at 2.1% after its first-half profit jumped 23% on record iron ore shipments, but missed market estimates.

Consumer staples surged 4.9%, led by a nearly 12% rise in Woolworths after it beat half-year profit estimates, with an underlying net profit of A$859 million ($607.48 million) and flagged stabilising market share.

A 10.7% rise in WiseTech Global helped technology stocks gain 5%, as the firm said it will slash about 2,000 jobs over the next two years in an artificial intelligence-related push, while its first-half profit beat estimates.

Across the Tasman Sea, New Zealand’s benchmark S&P/NZX 50 index was largely unchanged.