Stock market dips as inflation leaps on fuel prices
The Australian share market is heading for a seventh straight session of losses as the latest data on inflation hit a three-year high, paving the way for interest rate hikes.
The S&P/ASX200 fell 10.8 points, or 0.12 percent, to 8,699.9 points at midday, while the All Ordinaries index lost 7.2 points, or 0.08 percent, to 8,927.8 points.
The top 200 fell by as much as 45.4 points in early trading but recouped losses after the consumer price index rose 4.6 percent in the year to March.
The result was slightly below the predicted 4.8 per cent, but higher than the 3.7 per cent in the 12 months to February.
The US-led war against Iran has rattled markets, undercut inflation expectations and put a handbrake on hopes for global economic growth.
The central bank’s preferred truncated average annual price growth figure remains unchanged at 3.3 percent, but remains outside the central bank’s two to three percent target range as markets brace for a widely expected rate hike at next week’s meeting.
Energy and utilities stocks outperformed the broader market as oil prices rose as hopes for a deal to reopen the Strait of Hormuz faded and Iran’s leadership reportedly became dominated by hardliners.
The United Arab Emirates announced it will leave OPEC and OPEC+ on May 1, amid a widening divide with Saudi Arabia.
The move could ultimately increase global crude oil supplies, but it’s unlikely to have much of an impact on shipments or prices as long as the Strait of Hormuz remains effectively closed.
Woodside shares rose 1.3 percent to $32.81 despite extreme weather affecting March quarter production, while Santos gained one percent.
Coal producers also improved; Uranium stocks sold off as lackluster numbers from an AI leader raises questions about the AI narrative.
“A Wall Street Journal report on weaker-than-expected user growth and revenue targets at OpenAI has investors once again questioning the sustainability of sky-high AI spending and whether big tech can continue to foot the bill for these massive data center deployments,” said IG market analyst Tony Sycamore.
Raw materials stocks were under pressure as major miners BHP, Rio Tinto and Fortescue lost ground.
Gold miners were mixed as the precious metal fell below US$4,600 ($A6,413) an ounce, with the All Ordinaries gold sub-industry down 0.1 per cent.
Financials fell a modest 0.2 per cent as three of the four major banks traded lower, while ANZ rose 0.4 per cent to $36.18, citing plans to acquire French payments joint venture partner Worldline.
Consumer discretionary stocks posted a broad-based rally from four-week lows, up 0.5 percent in midday trading.
In other news from the company, Sea Forest rose three percent to $2.36 after its quarter-to-quarter revenue nearly doubled as demand for its seaweed-based, methane-burning animal feed increased.
The Australian dollar bought 71.73 US cents at 71.64 US cents at 5pm on Tuesday; This hasn’t changed much with the statistics bureau’s inflation surprise.
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