Australia: Shares reverse course to end lower as commodity stocks weigh

Australian shares gave up early gains to end lower on Tuesday (Oct 11), pressured by financials and commodity stocks, with investors exercising caution ahead of a key US data to get clues around the Federal Reserve's rate hike trajectory.

The S&P/ASX 200 index closed 0.3 per cent lower at 6,645 points.

"For the week ahead, (there's) a reality check with the impending US CPI and PPI report; if the print stays as solid as expected, (it) will cement the view for another 75 bps (basis points) hike by Fed in two weeks," Hebe Chen, a market analyst with IG Markets said.

Investors' focus on inflation data follows a stronger-than-expected US jobs report last week, with this week's data likely to show stubbornly high readings which could push the Fed to pursue its hawkish rhetoric.

Domestic financial stocks dropped 0.3 per cent, with Commonwealth Bank of Australia and National Australia Bank losing 1 per cent and 0.5 per cent, respectively.

Energy stocks shed 1.6 per cent as concerns of slowing demand due to rising Covid-19 cases in China kept oil prices in check.

Sector heavyweights Woodside Energy and Santos fell 2.1 per cent and 0.9 per cent, respectively.

Miners followed suit to give up 0.3 per cent. BHP Group, Rio Tinto and Fortescue Metals slid between 0.3 and 2.3 per cent.

Ahead of the government's first budget in two weeks, Australia's Treasurer Jim Chalmers said its economy will likely avoid a recession despite the world economy being in "a dangerous place right now".

IG Markets' Chen, though, said it would be "too optimistic" to expect Australia to escape a recession when two of its biggest trading partners - the US and China - were suffering strong economic headwinds.

Gold stocks slumped 0.8 per cent, with Newcrest Mining and Northern Star Resources falling 0.2 per cent and 0.6 per cent.

In New Zealand, the benchmark S&P/NZX 50 rose 0.4 per cent to 10,956.71, snapping from a three-day losing streak. REUTERS

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