Hopes that Australian share prices will avoid a seventh straight day of losses have been sunk by a fall in stocks in New York overnight as investors await key inflation data.
Drops in the major equities indicators on Wall Street have left investors looking at the prospect of an 0.4% dip in prices on Wednesday when trading resumes on the Australian Securities Exchange (ASX) at 10:00 am AEST (12:00 am GMT).
Such an outcome was indicated by futures trading on the ASX, where the June share price index contract was last quoted 37 points below the prior settlement at 8,694 points at the time of writing.
Once trading begins, market participants will have to wait only 90 minutes for the March consumer price index data from the Australian Bureau of Statistics.
Commonwealth Bank of Australia economists are forecasting a jump in inflation of 1.1% month-on-month and 4.6% year-on-year.
“It’s going to give an insight into the impact of the (Iran) war on inflation,” said CommSec Equity Market Strategist James Gruber.
He said that would feed into the Reserve Bank of Australia’s decision next week on official interest rates, with the chances of a 25 basis point hike rated at 77%.
This will be the first full month showing the effect of the United States war with Iran on prices in Australia, given the initial attack was on 27 February.
U.S. technology shares fell after OpenAI missed revenue and user targets ahead of its planned initial public offering IPO, raising worries about the huge capital investment (capex) in artificial intelligence (AI).
The Dow Jones Industrial Average eased 0.1%, the S&P 500 dropped 0.5% and the Nasdaq Composite sank 0.9%.
"(OpenAI) is giving investors more food for thought, whether the growth is slowing and what that means for capex spending," Horizon Investment Services chief executive officer Chuck Carlson was quoted saying in a Reuters story.
The Australian sharemarket dropped to its lowest point since 7 April on Tuesday, with the ASX 200 Index diving 0.6% to 8,710.7 points as nine of the 11 sectors ended down.
Among ASX-listed companies, eyes will also be on the March quarter update from Woodside Energy (ASX: WDS).
In Australian fixed interest markets, the government bond yield curve was little changed, with two-year rates unmoved at 4.789% and 10-year rates rising just 0.04% to 5.063% at the time of writing.
