The local share market has managed to eke out some small gains despite inflation coming in hotter than expected, raising the possibility of a pivot back to more aggressive rate hikes.

The benchmark S&P/ASX200 index finished Wednesday up 12.3 points to 6810.9, a gain of 0.18 per cent. The broader All Ordinaries climbed 11.4 points to 7005.1, a 0.16 per cent gain.

It’s was the third straight day of gains for the Australian market, although the last two have been modest.

“I think the market obviously, to some extent, is finding its feet,” said Lucinda Chan, division director of private wealth at Macquarie Bank.

“It realises that inflation is going to be here for a long time, that the cost of living is going to continue to rise, and things have stabilised a little bit. So the reality is what it is, and the market is accepting of it.”

In morning trading the ASX200 had been up as many as 44.6 points, but it fell 19.7 points in the space of two minutes after the release of data showing consumer prices rose by 7.3 per cent in the 12 months to September 30.

Consensus expectations were for a 7.1 per cent rise, and economists such as NAB’s Alan Oster were predicting there was now a chance that the Reserve Bank would deliver another 50 basis point rate next month following the readout.

“It is a possibility – very hard to call,” Ms Chan said.

She said the “very prudent” budget that the Albanese government delivered on Tuesday night had had no immediate impact on the market, although it would longer-term.

The ASX’s 11 official sectors were mixed on Wednesday, with consumer staples dropping 2.4 per cent as Coles, Woolworths and BWS owner Endeavour Group suffered their worst losses since August following Coles’ first-quarter update.

While the supermarket said sales were up it warned that cost price inflation was “expected to increase in the second quarter, given the ongoing level of supplier CPI requests as well as further flooding impacting supply volumes”.

Coles dropped 2.7 per cent to $16.16, Woolworths fell 3.2 per cent to $32.33 and Endeavour Group retreated 4.6 per cent to $6.98.

The heavyweight mining sector was up 0.3 per cent, with BHP gaining 0.1 per cent to $38.54, Fortescue Metals down 0.8 per cent to $16.13 and Rio Tinto adding 0.6 per cent to $91.86.

After enjoying huge gains ever since Russia invaded Ukraine in February, coalminers had a second straight day of sharp losses.

Whitehaven fell 8.1 per cent to $9.52, New Hope retreated 7.1 per cent to $6.19 and Yancoal dropped 4.6 per cent to $5.46.

Whitehaven’s annual general meeting held no surprises, with 92 per cent of shares cast in favour of the remuneration report and 96 per cent in favour of a buyback of up to 25 per cent of its shares.

Meanwhile just 2.5 per cent of votes were cast in favour of an amendment to Whitehaven’s constitution put forward by climate activists, a few dozen of whom demonstrated outside the coalminer’s AGM in Sydney.

All the big banks were higher, with CBA up 0.2 per cent to $102.00, ANZ climbing $25.84, Westpac up 0.5 per cent to $24.01 and NAB up 0.4 per cent to $32.07.

Elmo Software soared 40.6 per cent to $4.63 after the cloud HR solution provider agreed to be taken over by Los Angeles-based private investment firm K1 for $4.85 a share, or $486 million.

Medibank Private plummeted 18.2 per cent to $2.87 as shares of the health insurer resumed trading for the first time since last Thursday following a devastating hack of customer data.

Medibank withdrew its guidance and said it does not have cyber insurance. It predicted the hack would cost it at least $25m to $35m in non-recurring costs, not including remediation, regulatory or litigation-related expenses that Medibank said were difficult to predict.

The Australian dollar also jumped on the inflation data, climbing above 64 US cents for the first time in nearly three weeks.

The Aussie was buying 64.21 against the greenback, from 63.25 US cents at Tuesday’s ASX close.

ON THE ASX:

* The benchmark S&P/ASX200 index on Wednesday gained 12.3 points to 6810.9, a gain of 0.18 per cent.

* The broader All Ordinaries advanced 11.4 points, or 0.16 per cent, to 7005.1.

CURRENCY SNAPSHOT:

One Australian dollar buys:

* 64.21 US cents, from 63.25 US cents at Tuesday’s close

* 94.95 Japanese yen, from 94.18 yen

* 64.37 Euro cents, from 64.08 Euro cents

* 55.96 British pence, from 56.07 pence

* 111.29 NZ cents, from 110.81 NZ cents.

 

Derek Rose
(Australian Associated Press)