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Miners top laggard, gold and energy stocks dip
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Banking stocks lead gains
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NZ inflation slows but remains hot in Q1
(Updates to close)
By Mehr Bedi
April 20 (Reuters) - Australian shares struggled for
direction on Thursday, as mining and gold stocks offset gains
from financials, with investors eyeing cues from global central
banks on monetary policies amid a high inflation environment.
The S&P/ASX 200 index closed flat at 7,362.20
points. The benchmark ended 0.1% higher on Wednesday.
Expectations for more hikes from central banks pushed yields higher after Britain reported a slight decline in inflation in March, but remained the only country in western Europe in double-digits.
Earlier this week, minutes from the Reserve Bank of Australia's April 4 policy meeting revealed the decision not to hike was a close call, with the board considering further tightening in May if inflation and demand failed to cool. "The hawkish tone in the minutes has the Australian interest rate currently pricing in a 25% chance of a 25 basis point rate hike to 3.85% at the next RBA Board meeting in May," said Tony Sycamore, analyst at IG Securities. Miners were the top laggards on the benchmark due to a fall in iron-ore prices overnight. Mining behemoths BHP Group and Fortescue Metals Group fell 2.5% and 1.1%, respectively. Rio Tinto dropped more than 2% after the world's largest iron-ore producer flagged inflationary worries despite a record Pilbara shipments quarter. Gold stocks also fell 1.8% after bullion lost its shine after U.S. yields rose. Financials rose 1.3%, with all of the "Big Four" banks closing in the green. Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index fell 0.3% to finish the session at 11,879.68 points.
New Zealand's consumer inflation came in lower than expectations in the first quarter but remained near historic highs, reinforcing market bets of another interest rate hike in May. "Interest rates will need to remain high for some time yet, and the RBNZ is likely to maintain a hawkish stance in order to avoid an unwanted drop in borrowing rates," said Satish Ranchhod, Senior Economist at Westpac NZ said. (Reporting by Mehr Bedi in Bengaluru; editing by Uttaresh Venkateshwaran)
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