Australian shares snapped a three-session rally to close lower on Tuesday, with the banking sub-index as the major laggard, as traders considered concerns of stubborn inflation and dampening hopes of a U.S.-Iran peace deal.
The S&P/ASX 200 index finished 0.4% lower at 8,657.80.
Risk appetite was dented by shaky prospects of an imminent resolution in the Middle East after fresh U.S. strikes in the region, adding to worries of sticky inflationary pressures brought on by surging oil prices.
"The prospect of another firm domestic CPI reading tomorrow has revived fears that inflation could become more entrenched, potentially keeping pressure on interest-rate-sensitive parts of the market," said Greg Smith, investment specialist at Generate KiwiSaver Scheme. Financials lost 0.7% with Commonwealth Bank of Australia inching down 0.2%. The top lender has slid around 5% this month after flagging Middle East-related risks, while investors also weighed whether federal budget tax changes could curb mortgage credit growth.
Energy stocks booked losses for the second straight day, with Woodside Energy marginally falling 0.1%. Santos surrendered earlier gains to close down 0.9%, after unveiling plans to prioritise LNG and oil growth while aiming to reduce debt by $2.5 billion by 2030.
Mining stocks were an outlier to slightly rise 0.2%, parallelling steady copper prices. BHP and Rio Tinto gained 0.4% and 0.3%, respectively.
Gold miners however snapped a three-day winning run, tracking lower bullion prices. Northern Star Resources and Evolution Mining fell 1.2% and 0.6%, respectively. Among individual stocks, bourse operator ASX fell 13.2% to its lowest in nearly two months on flagging higher tech-driven costs. Meanwhile, Atlas Arteria rose nearly 1% after an independent expert backed its rejection of IFM Global Infrastructure Fund's A$6.89 billion ($4.93 billion) takeover. New Zealand's S&P/NZX 50 index ended up xx% at xx. Fisher & Paykel Healthcare was among the top gainers on the benchmark after forecasting upbeat annual earnings.
($1 = 1.3963 Australian dollars)
