Half-time wrap:
Australian stocks skidded after a sharp increase in headline annual inflation revived fears of additional interest rate hikes.
A day after its best session in more than five weeks, the ASX 200 slumped 70 points or 0.89% by mid-session.
The market - already under pressure from weak leads from Wall Street and commodity markets - shed an additional 40 points in a matter of minutes after annual headline inflation jumped to a six-month high of 4% last month from 3.6% in April.
Consumer prices increased more than expected, thanks to rises in electricity, food, alcohol, tobacco, transport and rent. Economists had been expecting a more modest increase in year-on-year growth to 3.8%. The annual trimmed mean rose to 4.4% from 4.1% the previous month.
The yield on three-year government bonds soared 14 basis points, a sign traders anticipate the RBA may be forced to raise benchmark rates. Deutsche Bank called for the central bank to raise the cash rate target by 25 basis points at its next meeting in August.
"Inflation is not only elevated but moving further away from the RBA's target. That suggests policy is not sufficiently tight," tweeted City Index APAC market analyst David Scutt.
Tech and utilities were the only sectors to resist the sell-off. Miners, REITs and consumer stocks fared worst.
Personal trading: Hope no one was caught out by that 11.30 slump. Not exactly a big surprise, considering how prices have been trending. I scalped SVY and NOU this morning. Waiting for a few others to come good.
