Australian shares tumble as inflation fears lift rate outlook

Australian equities declined on Wednesday as expectations grew that the U.S. Federal Reserve could be forced to raise interest rates sooner than previously anticipated following hotter-than-expected inflation data.

The S&P/ASX 200 fell 0.46%, or 40.30 points, to close at 8,630.40, marking a 20-day low, News.Az reports, citing Yahoo Finance.

In the United States, the consumer price index rose 3.8% in the 12 months through April, the largest year-on-year increase since May 2023, fueling concerns over prolonged global inflation pressures.

At the same time, Brent crude oil prices hovered around $107 per barrel as negotiations between the United States and Iran remained stalled.

Domestically, Australia’s federal budget for fiscal years 2026–2027 includes major policy changes such as adjustments to capital gains tax, negative gearing rules and trust taxation, measures analysts say could strengthen the country’s long-term fiscal position.

Data from the Australian Bureau of Statistics showed that Australia’s seasonally adjusted wage price index rose 0.8% in the March quarter, unchanged from the previous quarter. The number of total loan commitments for dwellings fell 6.2% to 139,794 between the March and December 2025 quarters, while new home loans declined 6.9% to 82,453, with total loan value dropping 4.3% to AU$61.42 billion.

In corporate news, Commonwealth Bank of Australia reported a cash net profit after tax of about AU$2.7 billion for the fiscal third quarter, up 4% year-on-year. However, its shares fell 10% after the bank recorded higher loan impairment expenses of AU$316 million and increased provisions by AU$200 million.

Temple & Webster Group said it has introduced a margin optimization program in response to weakening consumer confidence, expecting improved profitability from the fourth quarter of fiscal 2026. The company reported its strongest-ever April EBITDA at about AU$2.5 million, but its shares still fell 5%.

Meanwhile, Aristocrat Leisure posted adjusted earnings of AU$1.29 per share for the first half, up from AU$1.163 a year earlier, with revenue steady at AU$3.03 billion. Its shares rose more than 13% following the results.

News.Az 

By Nijat Babayev