Australian share prices are set to extend their losses on inflation worries, and after stocks in New York fell amid profit-taking taking Wall Street.
The main Australian Securities Exchange (ASX) price marker is expected to start about 0.5% lower, with the S&P/ASX 200 share price index December contract trading 41 points under the prior settlement at 8,769 points, at the time of writing.
“Aussie shares are likely to fall at the open on Thursday with risk appetite expected to remain down after a hotter than expected inflation report softened expectations of monetary policy easing,” Chief CommSec Economist Ryan Felsman said.
He said concerns about inflation, particularly the higher-than-expected 3% headline number for August released on Wednesday, could mean the Reserve Bank of Australia scaled back its cautious approach to lowering interest rates.
But CBA economists were still expecting a 25 basis point rate cut in November after quarterly inflation numbers are released at the end of October.
Felsman said energy shares like Santos (ASX: STO), Woodside Energy (ASX: WDS) and Beach Energy (ASX: BPT) could perform well on the back of a higher oil price overnight.
But gold miners could join others in coming under selling pressure after the precious metal price dropped in offshore futures trading, he said.
United States stocks closed lower for a second successive day on Wednesday (Thursday AEST) as investors locked in profits from indices rising to record highs and after Federal Reserve Chair Jerome Powell warned about elevated asset values.
Powell said that asset prices appeared “fairly highly valued”, but the current environment did not pose “elevated financial stability risk”.
The Dow Jones Industrial Average dropped or 0.4% and the S&P 500 and Nasdaq Composite each lost 0.3%.
The Australian market had finished down 0.9% on Wednesday, with the S&P/ASX 200 index closing down 81.40 points lower at 8,764.5 after the inflation data.
Companies to watch include Premier Investments (ASX: PMV), which has released its full-year results amid a sharp focus on the Peter Alexandra and Smiggle brands, and Suncorp (ASX: SUN), which holds its annual general meeting.
In fixed interest markets, yields on Australian Government bonds jumped, with two-year rates putting on 0.34% to 3.495% and 10-year rates adding 0.28% to 4.341%.
