Aussie shares edge higher as April inflation eases
A rally in miners has helped counterbalance weakness in banking stocks, as the bourse crawls higher on the back of softer than expected inflation figures.
Australia’s share market has shrugged off an early wobble after April inflation came in cooler than expected, rising the odds the Reserve Bank will hold rather hike the interest rate at its June meeting.
The S&P/ASX200 crept 8.5 points higher by midday on Wednesday, up 0.11 per cent, to 8,667.2, as the broader All Ordinaries slipped 16.1 points, or 0.18 per cent, to 8,898.7.
April’s headline consumer price index figure came in at 4.2 per cent over 12 months, lower than an expected 4.4 per cent and easing from March’s 4.6 per cent.
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By continuing you agree to our Terms and Privacy Policy.The Reserve Bank’s preferred trimmed-mean measure ticked slightly higher to 3.4 per cent, but both figures remain outside the central bank’s 2-3 per cent target range.
Financial stocks held the index back from significant gains, the heavyweight sector down 1.2 per cent and tracking with even bigger losses for the big four banks, as Westpac slumped two per cent after copping a $26 million regulator fine for failing to respond to customer hardship notices.
The basic materials sector improved by more than one per cent, with strong leads from South32 and Lynas Rare Earths, while mega miners BHP and Fortescue also advanced.
Gold miners were broadly positive as the precious metal stalled near $US4,500 ($A6,285) an ounce.
Energy stocks edged higher, as Brent crude jumped overnight before easing to $US95.90 a barrel, as tensions flared in the Middle East and both Iran and the US played down hopes of an imminent deal.
With the Persian Gulf situation still fluid and the major players at odds over the Hormuz Strait, Iran’s nuclear ambitions and its frozen assets, oil price volatility could persist for some time, Ebury economist Anthony Malouf said.
“Even if some sort of an agreement was to come about, experts have noted that a full nuclear agreement could take months of further negotiation given the technical complexity involved,” he said.
Consumer discretionary stocks surged 0.8 per cent as the odds of a fourth consecutive RBA rate cut eased, with decent moves from JB Hi-Fi, Super Retail and Harvey Norman.
Eagers Automotive fell 2.2 per cent after supply chain concerns shrouded an otherwise positive earnings outlook.
In other company news, Dan Murphy’s and BWS owner Endeavour tumbled three per cent to a record-low of $2.95 after flagging plans to slash costs by $300 million over three years and exit most of its winery businesses.
Gina Rinehart has taken an indirect stake of more than nine per cent in Southern Cross Media, after Hancock Prospecting-owned Hanrine Finance loaned tens of millions of dollars to Bruce McWilliam to fund his investment in the media company.
Two companies have been short-listed to take over the troubled Whyalla steelworks, with M Resources and India’s Jindal Steel emerging as final bidders.
The Australian dollar is buying 71.57 US cents, down slightly from 71.65 US cents on Tuesday at 5pm.
