The Australian sharemarket experienced a paring of gains on Wednesday following the release of higher-than-anticipated inflation figures for October. The S&P/ASX 200 index, which had been trading strongly, saw its gains trimmed after the latest consumer price index (CPI) data was published by the Australian Bureau of Statistics (ABS).
At 11.40am AEDT, the S&P/ASX 200 index was up 0.8 per cent, or 71.70 points, to 8608.70. Prior to the 11.30am AEDT data release, the benchmark index had risen by 1.1 per cent, indicating a more robust market performance before the inflation figures were factored in. The ABS reported that the consumer price index for October rose to 3.8 per cent year-on-year, an increase from the 3.5 per cent recorded in the previous month.
Market consensus had anticipated a slightly lower figure, with forecasts pointing to a 3.6 per cent increase for the 12 months to October. Economists had also predicted a monthly decrease of 0.2 per cent. Despite the higher-than-expected inflation data, market expectations regarding interest rate movements by the Reserve Bank of Australia (RBA) remain largely unchanged.
Markets are currently not anticipating any rate cuts by the RBA in the immediate months ahead. The unexpected inflation result is unlikely to significantly alter these expectations, suggesting that the central bank is expected to maintain its current monetary policy stance in the near term.
