Australia: Shares subdued as investors await US inflation data

AUSTRALIAN shares were muted on Tuesday (Jul 12), after losses in miners offset strength in bank stocks, as investors awaited US economic data this week for clues on the Federal Reserve’s stance on monetary policy.

The S&P/ASX 200 closed 0.1 per cent higher at 6,606.30 points. The benchmark fell 1.1 per cent on Monday.

The Australian market is being influenced by macroeconomic data right now, so I think the market is going to be treading water until we get some more news this week, said Brad Smoling, managing director at Smoling Stockbroking.

US consumer price index data for June is due on Wednesday and June retail sales data is expected on Friday.

The data should provide clues on the outcome of the Federal Reserve’s upcoming policy meeting, where a 75 basis point (bps) interest rate hike is expected.

Rate-sensitive financial stocks advanced 0.7 per cent, with the “Big Four” banks — Commonwealth Bank of Australia, National Australia Bank, Westpac Banking and Australia and New Zealand Banking Group — up between 0.1 and 1.4 per cent.

Healthcare stocks, which are export-focused, gained 1.1 per cent as the dollar hit a 2-decade peak. CSL hit a 6-month high, adding 1.7 per cent.

On the downside, miners dropped 1.4 per cent as persistent concerns about weak demand in top steel producer China hurt iron ore prices.

Lithium miners, including Leo Lithium, Ioneer and Core Lithium, were among the sub-index’s top decliners.

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Sector majors BHP and Fortescue Metals Group declined 1.2 per cent and 0.2 per cent respectively, while rival Rio Tinto was up 0.1 per cent.

Domestic data on the day showed consumer sentiment slid to pandemic lows in July amid surging cost of living and rising interest rates.

New Zealand’s benchmark S&P/NZX 50 ended flat at 11,103.39 points, a day before its central bank is widely expected to raise rates by another 50 bps.

Maybank analysts expect a further 4 50-bps hikes from the Reserve Bank of New Zealand this year. REUTERS