Aussie shares give up early gains to end flat after steady inflation print

Mineral Resources

28/05/2025 07:45

RBNZ cuts rate to 3.25%

Energy stocks gain 2.2%

Australia's core inflation rose in April

Updates to close

By Rajasik Mukherjee

May 28 (Reuters) - Australian shares ended slightly lower on Wednesday, easing from a five-month high after inflation data came in a tad hotter than expected but kept rate-cut hopes alive.

The S&P/ASX 200 index .AXJO closed slightly lower at 8,396.9 at the close of trade. It ended up 0.5% on Tuesday.

The benchmark, which opened higher and continued its climb till midday, began pulling back after the CPI data was released at 1230 local time, with losses being led by the heavyweight banking and mining sectors.

Data showed monthly consumer price index (CPI) rose 2.4% in April compared with a year earlier, unchanged from March. Though slightly above the median forecasts of 2.3%, the print was still within the central bank's target band of 2-3%.

"CPI was fractionally higher than expected ... which is probably tempering enthusiasm about the rates outlook," said Luke Laretive, CEO & investment adviser at Seneca Financial Solutions while forecasting a 25 basis points cut in July.

"Softening in bullishness has hit the banking sector most notably...with most investors now realising that we have probably seen peak interest rates here in Australia."

The rate-sensitive financials .AXFJ lost 0.7% with all the "Big Four" banks falling between 0.5% and 0.9%.

Miners .AXMM declined 0.4% on the back of lower ironore prices with sector giant BHP Group BHP.AX falling 0.4%, while lithium miner Mineral Resources MIN.AX shed 5.3% after the firm trimmed its annual Onslow iron volume outlook. IRONORE/

Bucking the trend, energy stocks .AXEJ soared 2.2% tracking higher oil prices.

"Energy stocks have been sold off recently and we are now seeing the bargain hunters move in on some of these stocks," said Brad Smoling, managing director, Smoling Stockbroking.

IT stocks .AXIJ rose 1.2% in tandem with its U.S. peers. Tech giant WiseTech WTC.AX added 0.4%, its fourth consecutive session of gains.

New Zealand's benchmark S&P/NZX 50 index .NZ50 fell 1.7% to end at 12,362.26 points, little affected by the central bank's expected rate cut.

 (Reporting by Rajasik Mukherjee in Bengaluru; Editing by Nivedita Bhattacharjee)

 ((Rajasik.Mukherjee@thomsonreuters.com))

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