Australia: Shares hit 1-year low after surprisingly strong inflation

AUSTRALIAN shares fell to a one-year low on Thursday, weighed down by losses in technology and financial stocks, as stronger-than-expected third-quarter inflation data raised bets that the central bank might raise rates next month.

The S&P/ASX 200 index retreated 0.7 per cent to 6,854.20 by 1146 GMT, hitting its lowest level since Oct 31, 2022.

Data showed on Wednesday the consumer price index (CPI) rose 1.2 per cent in the third quarter, above market forecasts of 1.1 per cent and up from a 0.8 per cent increase the previous quarter.

Futures are now pricing in a 66 per cent chance of a quarter-point hike to 4.35 per cent by the Reserve Bank of Australia at its November policy meeting, compared with 35 per cent before the data.

Market focus has now turned to economic data from the United States including third-quarter gross domestic product numbers due later in the day for further direction.

In Sydney, technology stocks retreated 2.5 per cent to hit their lowest level since May 17.

Interest rate-sensitive financial stocks slid 0.5 per cent, with the so called “big four” banks falling between 0.4 per cent and 0.7 per cent.

Mining stocks edged down 0.1 per cent, with BHP Group and Rio Tinto down between 0.1 per cent and 0.2 per cent.

Bucking the trend, energy stocks jumped 0.6 per cent on strong oil prices.

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Among individual stocks, Fortescue fell 1 per cent after the company reported a 3 per cent drop in quarterly iron ore shipment.

Lithium miner Allkem posted a 9.7 per cent jump in first-quarter revenue as higher production from its flagship Mt Cattlin project in Western Australia cancelled out the impact from lower lithium prices. Shares were however down 3.4 per cent.

Coles Group posted a 3.6 per cent jump in first-quarter sales, boosted by higher contribution from its supermarkets section. Shares were down 0.6 per cent.

Meanwhile, Azure Minerals agreed to a takeover offer from Chilean mining giant Sociedad Química y Minera de Chile, in a deal implying an equity value of A$1.63 billion (S$1.41 billion) for the lithium producer.

New Zealand’s benchmark S&P/NZX 50 index fell 0.6 per cent to 10,820.22. REUTERS