Australia shares fall on gloomy U.S. inflation data; CBA rises on earnings beat

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By Upasana Singh

May 12 (Reuters) – Australian stocks ended lower on Thursday, hit by losses in technology stocks as higher-than-expected U.S. inflation data stoked worries of aggressive rate hikes, although the biggest domestic bank rose after third-quarter cash earnings beat.

The S&P/ASX 200 index .AXJO closed 1.8% lower at 6,941.00, with broad-based losses across all sub-indexes. The benchmark was up 0.2% on Wednesday.

“Market sentiment was battered by the latest U.S. inflation report for April,” said Kunal Sawhney, chief executive officer of Kalkine Group.

The U.S. consumer index price data showed that inflation has probably peaked in April, though it is likely to stay hot for a while and keep the Federal Reserve’s foot on the brakes to cool demand. nL2N2X315F

Domestic technology stocks .AXIJ tracked their U.S. counterparts lower, tumbling 8.7% in their biggest drop in more than two years and fifth consecutive session of losses. .N

Australia-listed shares of Block Inc SQ2.AX, WiseTech Global WTC.AX and Xero XRO.AX retreated between 6.9% and 17.6%.

Financials .AXFJ slipped 0.8% to hit a near 2-month low, falling for a sixth straight session.

Australia and New Zealand Banking ANZ.AX and Westpac Banking WBC.AX fell 1% and 1.9%, respectively, but Commonwealth Bank of Australia CBA.AX rose 0.6% after beating quarterly cash earnings estimate. nL3N2X33YY

The metals and mining index .AXMM slid 2%, with mining majors BHP Group BHP.AX, Rio Tinto RIO.AX and Fortescue Metals FMG.AX dropping between 1.6% and 2.8%.

Weak oil prices dragged energy stocks .AXEJ down 2.3%, with oil and gas explorers Woodside Petroleum WPL.AX and Santos STO.AX declining 3.1% and 2.1%, respectively. O/R

“Looking ahead, the Australian share market is expected to remain volatile amidst growing recession risks and commodity price fluctuations,” Sawhney said.

“To navigate the upcoming volatility, it seems imperative for investors to avoid panic selling and remain patient and judicious.”

New Zealand’s benchmark S&P/NZX 50 index .NZ50 fell 0.5% to 11,177.36, after data showed the country’s near-term inflation expectations rose in the second quarter. nS9N2V502F

(Reporting by Upasana Singh in Bengaluru; Editing by Rashmi Aich)

((Upasana.Singh@thomsonreuters.com))

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