29.10.202501:25:40UTC+00Australian Shares Fall After Hot Inflation Data

The S&P/ASX 200 index experienced a decline of 0.8%, dipping to approximately 8,940 on Wednesday, marking its lowest point in two weeks. This movement was influenced by inflation data that exceeded expectations, leading to speculation that the Reserve Bank of Australia (RBA) might maintain interest rates at their current levels for a longer period. The closely monitored trimmed mean Consumer Price Index (CPI) rose by 1% compared to the previous quarter, surpassing the anticipated 0.8% increase, while the annual rate escalated to 3%, up from 2.7%. This is the first such increase since December 2022. Headline inflation also saw a rise, spurred by increased costs in housing and travel, alongside the cessation of energy rebates. These data points reinforced the RBA's stance that inflation remains persistently high, prompting markets to estimate nearly a 90% likelihood that the RBA will keep the cash rate steady at 3.6% during its upcoming meeting on November 4. Financial stocks, particularly sensitive to rate changes, dropped by 1.1%, with declines ranging from 0.6% to 1.7% among the major banks. The real estate sector slipped 0.8%, influenced by a 2% decrease in Stockland's shares, while the healthcare sector saw a 2.6% decline, largely due to a significant 4.8% drop in biotech firm CSL's shares, following setbacks with its U.S. Seqirus spinoff.