28.01.202605:59:49UTC+00Australian Stocks End Lower on Hot CPI Data

The S&P/ASX 200 fell by 0.1% to close at 8,934 on Wednesday, reversing earlier gains and ending a three-day win streak. This change followed a stronger-than-anticipated inflation report, which heightened expectations for imminent interest rate hikes. Annual inflation increased to 3.8% in December, surpassing the forecast of 3.6% and November's figure of 3.4%. Additionally, monthly inflation was higher than expected, rising to 1.0% from 0.7%. The quarterly trimmed mean inflation, a key measure for the Reserve Bank of Australia (RBA), registered at 0.9%. Although this was slightly lower than the previous month, it still exceeded predictions. Consequently, traders increased the likelihood of a quarter-point interest rate rise at the RBA meeting on February 3 to over 70%, up from about 60% prior to the data release. Rates-sensitive sectors such as real estate and consumer discretionary stocks declined, and financial stocks finished 0.3% lower, with three of the top four banks experiencing losses. Nonetheless, declines were mitigated by gains in commodity-related stocks, as energy and gold sectors each saw increases of over 2%. Leading miners also rose by 1.5%.