News: XEJ Australia shares slump with all sectors red; inflation data clouds rate cut hopes

	  ASX 200 logs lowest close since May 3 

	  Financial stocks log worst day since April 19 

	  April inflation at a five-month high 

	  Energy stocks down for sixth straight session 

(Updates to close)

Australian shares ended lower on Wednesday, incurring broad-based losses with banking and mining sectors losing the most, as stronger-than-expected inflation data pushed back rate cut expectations and prompted investor outflow from riskier assets.

The S&P/ASX 200 index (xjo) ended 1.3% lower at 7,665.60 points, its lowest close since May 3. It was also the benchmark's worst day since May 1.

Data released earlier in the day showed inflation in April jumped to a five-month high. Combined with a lower-than-expected retail sales growth, the data raised concerns over the economic impact of prolonged high interest rates and uncertainty over monetary policy easing.

"Our central case is that the RBA's cash rate will be on hold through 2024 with rate cuts not beginning until Q2 2025. Today's print supports our 'higher-for-longer' view for the RBA," Paul Bloxham, Chief Economist, Australia, New Zealand and Global Commodities at HSBC wrote in a client note.

On the benchmark, the financial index .AXFJ was the biggest laggard, falling 1.7%, its worst day since April 19 and its lowest close since May 3, as interest rate worries persisted.

The 'Big Four' banks dipped between 1.6% and 2.5%. Heavyweight miners .AXMM pulled the benchmark down further, closing 0.5% lower, as iron ore futures dipped.

Sector giants Fortescue (FMG) and Rio Tinto (RIO) were down 3.6% and 1.5%, respectively.

Energy stocks .AXEJ fell 0.6% tracking the broader market, recording their sixth straight day of losses.

Energy majors Woodside (WDS) and Santos (STO) were down 0.6% and 1.0%, respectively.

New Zealand's benchmark S&P/NZX 50 index (nz50) closed largely flat at 11,678.68 points.