The Australian share market has faded into the close ahead of another US inflation readout that’ll be key to determining how quickly interest rates rise in the world’s largest economy.
After being flat around lunchtime, the benchmark S&P/ASX200 index finished Wednesday down 37.1 points, or 0.53 per cent, to 6992.7.
The broader All Ordinaries closed down 39.9 points, or 0.55 per cent, to 7238.7.
It’s the eighth consecutive session the ASX has closed within 30 points of 7,000, City Index analyst Tony Sycamore noted in an email.
“I think in terms of our markets, we’re all waiting with bated breath to see to see what the US CPI does overnight,” Betashares chief economist David Bassanese told AAP.
“I think there’s been a bit of taking risk off the table in the last couple days in anticipation of that. I think that’s been the key focus, it just seems to be a lot of nervousness around the CPI.
“It’s going to be interesting how the market takes it, because the headline number looks like it’s going to obviously fall on the back of oil prices, but the core measure is still going to stubbornly high.”
Higher-than-expected inflation would increase pressure on the Federal Reserve to continue raising interest rates aggressively, making riskier equities look less attractive.
All but two of the ASX’s 11 sectors were down on Wednesday, with tech dropping 3.8 per cent following overnight losses for their counterparts on Wall Street.
Computershare closed down 4.9 per cent to a one-month low of $24.21 per cent after the Melbourne-based stock transfer company announced full-year earnings that included a “disappointing” $6.3 million loss in its mortgage services business.
Elsewhere in the space, Xero fell 3.8 per cent, Wisetech Global dropped 1.4 per cent and Afterpay owner Block retreated 6.0 per cent.
In the heavyweight financial sector, Commonwealth Bank closed down 0.3 per cent to $101 after Australia’s second-biggest company announced better-than-expected full-year earnings while warning about the short-term economic outlook.
“We’re starting to see a reduction in spend across our debit and credit cards on a seasonally adjusted basis, with spending falling more acutely for interest-rate sensitive cohorts such as homebuyers,” CBA chief executive Matt Comyn told analysts.
But the other big banks rose, with ANZ up 3.4 per cent to $23.46 and Westpac and NAB both climbing 1.4 per cent, to $22.20 and $30.22, respectively.
IAG dropped 1.1 per cent to $4.459 after the insurance giant said it would be increasing its natural peril allowance after blowing through its 2021/22 allowance by $354 million.
Chief executive Nick Hawkins said IAG wanted to “help ensure the business can withstand the impact of increasing severity and frequency of natural perils”.
The mining sector fell 1.0 per cent, with BHP down 1.3 per cent to $38.30, Rio Tinto dipping 0.2 per cent to $99.18 and Fortescue dropping 0.6 per cent to $18.83.
St Barbara dropped 11.6 per cent to a two-week low of $1.07 after the goldminer said rising energy, labour and consumables costs would lead to increased operating expenses at its historic Gwalia mine in WA.
A2Milk fell 6.9 per cent to $4.76 after the US Food and Drug Administration delayed action on it and other infant formula makers’ requests to import formula into the United States to relieve shortages there.
In healthcare, Imugene gained 9.3 per cent to 29.5c after the Sydney biotech announced US researchers had dosed another breast cancer patient with Imugene’s experimental cancer treatment, a genetically modified poxvirus.
Meanwhile, the Australian dollar was buying 69.66 US cents, from 69.71 US cents on Tuesday.
ON THE ASX:
* The benchmark S&P/ASX200 index on Wednesday closed down 37.1 points, or 0.53 per cent, at 6992.7.
* The All Ordinaries dropped 39.9 points, or 0.55 per cent, to 7238.7.
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 69.66 US cents, from 69.71 US cents at Tuesday’s close
* 94.07 Japanese yen, from 94.05 yen
* 68.22 Euro cents, from 68.29 cents
* 57.65 British pence, from 57.71 pence
* 110.69 NZ cents, from 110.07 cents.
Derek Rose
(Australian Associated Press)