Australian shares slip as miners, banks weigh ahead of inflation data

Australian equities retreated on Tuesday as lower commodity prices weighed on mining stocks and financials declined ahead of a key inflation print.

Globally, a sustained calm in the Middle East following a weekend halt in hostilities supported risk sentiment but chip shares fell in Asia.

Australia’s S&P/ASX 200 index fell 0.3% to 8,865.1 points as of 0020 GMT after rising 1.4% on Monday.

US President Donald Trump said Washington was having “good talks” with Iran and that a deal was possible, easing concerns over supply disruptions and pushing oil prices lower.

He warned US attacks would resume if negotiations failed.

The conflict has underscored Australia’s reliance on imported fuel, which accounts for nearly 80% of domestic demand.

The country is weighing its first new oil refinery in more than 60 years as the Middle East war squeezes supplies.

In Sydney, miners slid 1.1% as iron ore prices dropped on seasonally faltering demand in China.

Sector majors Rio Tinto and BHP fell 1.9% and 0.9%, respectively.

Gold stocks shed 1.3% as lower bullion prices weighed on the sector, with Evolution Mining and Northern Star Resources losing 1.2% and 0.7%, respectively.

Financials fell as much as 0.7% in their worst session in a week.

All “Big Four” banks declined between 0.5% and 0.9%.

Investors awaited the second-quarter inflation report, due on Wednesday, for guidance on the Reserve Bank of Australia’s next move.

Markets imply a roughly 30% chance of an August rate hike.

Energy stocks declined as much as 1.2% to their lowest in more than a week.

Santos and Woodside Energy fell 1.6% and 0.7%, respectively.

Coal producer Whitehaven Coal reported a rise in fourth-quarter output, but came in line with the Visible Alpha consensus estimate.

Shares of the firm were down as much as 1.2%.

Countering losses, discretionary and healthcare stocks advanced more than 0.8% each. New Zealand’s benchmark S&P/NZX 50 index fell 0.2% to 13,823.15 points.