Source : THE AGE NEWS
The Australian sharemarket has trimmed early losses after the release of the latest inflation figures, which were not as high as feared.
The S&P/ASX 200 was down 7.1 points, or 0.1 per cent, to 8703.6 just after midday, with six of 11 industry sectors in the green as investors digested the data release from the Australian Bureau of Statistics.
According to the ABS, inflation jumped by 1.1 per cent in March to hit 4.6 per cent. Market economists had tipped an annual rate of 4.8 per cent.
The rise was largely due to a 32.8 per cent spike in petrol prices, the single largest monthly increase since the bureau started tracking monthly inflation in 2017.
Importantly, underlying measures of inflation – closely tracked by the Reserve Bank, which meets next week – showed a “moderate” increase of 0.3 per cent. Trimmed underlying inflation was at 3.3 per cent, where it had been last month.
Elsewhere, oil prices climbed overnight but dipped in early trade on Wednesday as uncertainty over the war in Iran lingers, while the United Arab Emirates announced it will exit the OPEC oil cartel in May. The price for a barrel of Brent Crude oil to be delivered in June slid 0.5 per cent to $US110.71 at 10.18am AEST, while US oil slid 0.8 per cent to $US99.13.
Local energy stocks rose in early trade, with Woodside Energy up 1.4 per cent after it told investors it was set to cash in from surging oil and gas prices as the Middle East conflict chokes the world’s oil supplies and ignites a scramble for spare cargoes.
The company’s average prices rose 11 per cent in the first quarter, but were on track to jump further after Iran’s closure of the Strait of Hormuz – a vital oil and gas shipping route – and missile strikes on a Qatari gas hub knocked out up to one-fifth of global liquefied natural gas (LNG) supplies last month.
“Further benefits of currently higher spot prices will be realised in subsequent quarters for LNG due to lagged contract pricing,” Woodside chief Liz Westcott said. Santos added 1 per cent and Ampol was up 0.4 per cent while Viva Energy was flat.
Childcare operator G8 Education tumbled 31.3 per cent after it announced it was closing 40 childcare centres across the country as it grapples with falling occupancy numbers.
One in 10 of its centres will shut down with the company saying in a statement the childcare sector, which has been embroiled in scandal, is facing a number of challenges.
“Occupancy across the sector is lower compared to 2024 and 2025 due to families experiencing sustained affordability pressures, falling birth rates, increased long-day care supply and confidence being impacted by serious child safety incidents,” G8 said.
Financial stocks are mixed. The ANZ Bank added 0.4 per cent but the Commonwealth Bank lost 0.5 per cent, National Australia Bank shed 0.7 per cent and Westpac declined 0.6 per cent in early trade.
Mining stocks are weaker, with BHP falling 2 per cent, Rio Tinto 1 per cent and Fortescue 0.5 per cent. The price of iron ore slid lower overnight and lost further ground this morning to be trading at $US105.75 per tonne in Singapore. Gold stocks are lower after the price of the safe haven asset fell overnight, with Northern Star down 0.1 per cent and Evolution Mining 1.1 per cent.
Outdoor advertising company oOh!media jumped 35.9 per cent after it received an unsolicited, non-binding, indicative proposal from Pacific Equity Partners to acquire the company in a deal valuing it at about $754 million.
Technology stocks are lower after weakness in the sector on Wall Street overnight. A report in The Wall Street Journal said some leaders at OpenAI are concerned about whether it can support its massive spending on data centres after missing targets for new users and revenue. WiseTech (1.1 per cent), TechnologyOne (0.4 per cent) and NEXTDC (1.1 per cent) were all lower in morning trade, while Xero edged up 0.2 per cent.
The Australian dollar was weaker at US71.70¢ at midday.
Overnight, the S&P 500 fell 0.5 per cent from its latest all-time high. The Dow Jones dropped 25 points, or 0.1 per cent, while the Nasdaq composite fell 0.9 per cent from its own record.
Stocks in the artificial intelligence industry led the way lower on Wall Street. Chip company Broadcom was the heaviest weight on the S&P 500 after sinking 4.4 per cent. Drops of 1.6 per cent for Nvidia and 3.9 per cent for Micron Technology also undercut the market. Elsewhere, Elon Musk’s blockbuster civil trial began in California.
The drops came just a day before several of the biggest spenders on AI are scheduled to report their latest results for the start of 2026. They could offer more clues on whether all the investment in AI is producing the kind of returns that shareholders care about.
Alphabet, Amazon, Meta Platforms and Microsoft are all reporting their latest quarterly results on Wednesday.
On Wednesday, the Federal Reserve is set to announce its latest decision on short-term interest rates. The widespread expectation is that it will hold the federal funds rate steady and hold off on resuming its cuts. Lower interest rates would help the economy, but they also risk worsening inflation when oil is expensive and tariffs are threatening to push prices higher.
Also on Wednesday, the Senate Banking Committee will vote on whether to confirm US President Donald Trump’s nominee, Kevin Warsh, to succeed Fed chair Jerome Powell. The committee is expected to approve Warsh and send his nomination to the full Senate.
With AP
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