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Inflation surprise halts Australian indices in their tracks

Surprisingly high inflation data stopped the Australian share market from consolidating early gains on Wednesday, turning the day into a stalemate in terms of the indices. The benchmark S&P/ASX 200 (INDEXASX: XJO) closed 2.6 points lower, at 6,854, losing early gains. The broader All Ordinaries (INDEXASX: XAO) index, however, managed a 0.7-point gain, to 7,046.

Australia’s headline consumer price index (CPI) rose 1.2% in the September quarter compared with April-June, the Australian Bureau of Statistics (ABS) reported.

An economists’ survey had predicted a 1.1% quarter-on-quarter rise, and the figure was up from 0.8%. The core CPI measure also rose 1.2% for the quarter, against a forecast of 1.1%. In annual terms, core inflation was up 5.2%, against a forecast of 5%.

The strong core inflation figure was widely construed as virtually locking-in a 25-basis-point rate rise at the Reserve Bank board’s November meeting.

Firmer iron ore prices bolstered the resources sector, with BHP Group Ltd (ASX: BHP) gaining $1.13, or 2.6$, to $44.72; Fortescue Metals Group Ltd (ASX: FMG) up 67 cents, or 3.1%, to $22.02; and Rio Tinto Ltd (ASX: RIO) advancing $2.67, or 2.4%, to $116.27. Canadian-based high-grade iron ore producer Champion Iron Ltd (ASX: CIA) closed 27 cents, or 4.4%, higher at $6.38.

Champion Iron share price

Iron ore and lithium miner Mineral Resources Ltd (ASX: MIN) gained $2.66, or 4.6%, to $60.09 after reaffirming its FY24 volume guidance. IGO Ltd (ASX: IGO), which produces nickel and lithium, eased 2 cents to $10.85.

Lithium producer Pilbara Minerals Ltd (ASX: PLS) rose 9 cents, or 2.4%, to $3.88; while fellow producer Allkem Ltd (ASX: AKE) appreciated 38 cents, or 3.7%, to $10.56.

Rare earths producer Lynas Rare Earths Ltd (ASX: LYC) was up 30 cents, or 4.4%, to $7.12. Canadian-based uranium project developer NexGen Energy Ltd (TSE: NXE) gained 52 cents, or 5.8%, to $9.43, while Namibian-based uranium producer Paladin Energy Ltd (ASX: PDN) strengthened 1.5 cents, or 1.6%, to 96.5 cents, and Boss Energy Ltd (ASX: BOE), which is re-starting the Honeymoon uranium mine in South Australia, gained 15 cents, or 3.3%, to $4.69.

Green splash for Kogan among the red

Online retailer Kogan.com Ltd (ASX: KGN) spiked 39 cents, or 8.7%, to $4.86 after its sales returned to quarter-on-quarter growth, despite continuing to fall in annual terms.

Kogan share price

Property fund manager Dexus (ASX: DXS) dropped 23 cents, or 3.3%, to $6.70 after long-serving CEO Darren Steinberg announced that he was stepping down after 11 years with the company.

Woolworths Group Ltd’s (ASX: WOW) first-quarter sales rose 5.3% compared with a year ago – the shares dipped 72 cents, or 2%, to $35.63. Wagering luminary Tabcorp Holdings Ltd (ASX: TAH) lost 3.5 cents, or 4.1%, to 81.5 cents after suffering a 34% protest vote over executive pay at its annual general meeting.

Investment management firm Magellan Financial Group Ltd (ASX: MFG) dropped 19 cents, or 2.9%, to $6.34 after announcing that Chief Executive David George was stepping down with immediate effect. Board Director Andrew Formica will assume the role of executive chairman as the company searches for a replacement.

It was a red day for the big banks, with ANZ Group Holdings Ltd (ASX: ANZ) down 33 cents, or 1.3%, to $24.85; National Australia Bank Ltd. (ASX: NAB) losing 24 cents, or 0.8%, to $28.32; Westpac Banking Corp (ASX: WBC) weakening 8 cents, or 0.4%, to $20.80; and Commonwealth Bank of Australia (ASX: CBA) sliding 72 cents, or 0.7%, to $97.35.

ANZ Group Holdings share price

Biotech heavyweight CSL Limited (ASX: CSL) eased $1.20, or 0.5%, to $236.05. Telstra Group Ltd (ASX: TLS) was up 8 cents, or 2.1%, to $3.87.

Alphabet spells trouble for Wall Street

In the US, the broad S&P 500 (INDEXSP: .INX) index gave up 60.91 points, or 1.4%, to 4,186.77, the blue-chip Dow Jones Industrial Average (INDEXDJX: .DJI) shed 105.45 points, or 0.3%, to 33,035.93, and the tech-heavy Nasdaq Composite (INDEXNASDAQ: .IXIC) index walked back 318.65 points, or 2.4%, to 12,821.22. The Nasdaq was dragged lower by a 9.5% slump in Google’s parent Alphabet Inc Class A (NASDAQ: GOOGL), which put in it worst day since March 2020, after revenue in its Google cloud unit came well below analyst estimates.

A rash of earning reports came out after the closing bell, with Facebook’s parent Meta Platforms Inc (NASDAQ: META) and IBM Common Stock (NYSE: IBM) both beating earnings and revenue estimates.

In the bond market, the US 10-year yield rose 13.5 basis points to 4.961%, while the 2-year yield ended 7.8 basis points higher at 5.145%.

Gold strengthened US$9.43, or 0.5%, to US$1,982.11 an ounce. The global benchmark Brent crude oil grade rose US$2.06, or 2.3%, to US$90.13 a barrel, while US West Texas Intermediate oil retreated 16 cents, or 0.2%, to US$85.23 a barrel.

The Australian dollar is buying 62.9 US cents this morning, down from 63.77 cents at the ASX close on Wednesday.

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