Half-time wrap:
Aussie shares gave up initial gains after hotter-than-expected inflation data bolstered the case for more interest rate hikes.
The ASX 200 swung from a gain of around 40 points at this morning's peak to a mid-session loss of 11 points of 0.15%. The reversal came after both core and headline inflation measures came in ahead of economists' expectations, increasing pressure on the RBA to hike again next month.
The monthly Consumer Price Index rose for a second month, lifting the year-on-year increase in prices to 5.6% last month from 5.2% in August and 4.9% in July. Annual underlying inflation was 5.2% for the quarter, down from 5.9% in the June quarter, but shy of expectations for a larger decline to 5%.
In the wake of the report, ANZ said it now expected a quarter-point hike next month.
"If I had to sum the Q3 inflation report up in one word, it would be 'oops'," tweeted Matt Simpson, market analyst for City Index.
"The RBA minutes and Governor Bullock made it clear that the RBA will not hesitate to hike if inflation moves toward its target too slowly. But these numbers are simply pointing the wrong way. And that means the RBA’s November meeting is likely to be live, and the cash rate to be hiked to 4.35%."
Declines in rate-sensitive property stocks, supermarkets and healthcare providers out-muscled gains for bulk metal miners and Telstra.
Personal trading: Got some ERW at the low, but not enough to matter. Also took ICI.
