Australian shares edge higher, head for worst month in six; inflation data in focus

Australian shares edged up on Wednesday but were headed for their worst monthly decline in six months as investors stayed on the sidelines ahead of domestic inflation data due later in the day. The S&P/ASX 200 index rose 0. 1% to 8, 718. 1 points as of 0006 GMT. However, the benchmark was on track for its worst month since March, as rising oil prices and higher bond yields reignited concerns that inflation could remain elevated for longer. Consumer price data for August, due later in the day, is expected to accelerate to 4. 1% from 3. 5%, partly due to a jump in fuel costs. Core inflation is expected to stay at 3. 6%, well above the Reserve Bank of Australia’s target range of 2% to 3%. The data will come against the backdrop of the cash rate, set at a 15-year high on Tuesday alongside warnings of further hikes if needed to curb stubborn inflation. However, swaps suggest the central bank is likely to stay on hold through November and December, with no further rate increases priced in this year. On the bourse, gold miners firmed as much as 3. 2%, marking their highest level in a week, after gold prices rebounded after hitting a seven-week low. Northern Star Resources and Evolution Mining added 8. 4% and 1. 6%, respectively. The broader mining gauge also followed and was up 0. 6%. However, banks lost 0. 4%, with shares of the “big four” banks down between 0. 6% and 0. 8%. Energy stocks also dipped 0. 7%, continuing its fall for a fourth consecutive session, as oil prices took a breather. In company news, shares of Droneshield rose as much as 11. 5% to a one-month high of A$1. 80. The counter-drone technology company said its US unit had won the US Department of War’s Domestic Shield contract, allowing it to compete for and receive orders with a ceiling value of $500 million. In New Zealand, the benchmark S&P/NZX 50 index was flat at 13, 686. 42 points.

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