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Australia: Shares slip ahead of US inflation data; NZ follows suit
[BENGALURU] Australian shares slipped on Wednesday, as gains in the healthcare and information technology sectors were overshadowed by losses in financials ahead of US inflation data due later in the global day.
The S&P/ASX 200 index edged down 0.1 per cent to 5,847.5 by 0050 GMT. The benchmark rose 0.6 per cent on Tuesday.
The US consumer price inflation number "is going to be the underlying driver" of the timing of the next US rate rise, and it is "an absolute given that their trajectory is one of increasing rates," said James McGlew, executive director of corporate stockbroking at Argonaut Ltd. in Perth.
For the Australian market, he said, increasing US rates will put the focus on high yielding stocks and the financial index.
The Australian financial index slipped as much as 0.8 per cent early on Wednesday, with Commonwealth Bank of Australia (CBA), which went ex-dividend on the day, down as much as 3.3 per cent, weighing the most on the sector benchmark.
The financial index, which was the biggest drag on the main index, has a dividend yield of almost 8 per cent, according to Thomson Reuters Eikon data. A US rate hike mitigates the relative attractiveness of holding high dividend yielding Australian stocks.
"If the CPI data comes in benign or softer than the market is expecting, that would be positive for our financials and you would see them turn back again," said Argonaut's McGlew.
Materials rose with mining heavyweights BHP Billiton and Rio Tinto gaining about 0.5 per cent and 0.4 per cent, respectively.
Healthcare stocks gained the most, largely on account of CSL, which jumped as much as 6 per cent after reporting a 35 per cent jump in half-year profit.
New Zealand shares were on track to end Wednesday lower largely due to Fletcher Building Ltd.
New Zealand's benchmark S&P/NZX 50 index fell 0.5 per cent, or 43.22 points, to 8,079. Fletcher was down more than 11 per cent.
Fletcher said its chairman would resign as the debt-laden construction firm hiked the provisions for losses in its commercial building unit.