SYDNEY: Australian shares slipped 0.3 percent on Monday, retreating from eight-month highs hit last week with investors on tenterhooks ahead of inflation figures, which could spur the central bank to cut interest rates.
"We could see a rally," said Macquarie Equities division director Lucinda Chan, if the March-quarter consumer price index data on Tuesday comes within expectations.
The Reserve Bank of Australia has already indicated it will consider cutting the 4.25 percent cash rate at its next policy meeting on May 1, providing inflation numbers are tame.
Analysts forecast the key measure of underlying inflation rose a moderate 0.6 percent in the first quarter, nudging the annual rate down to around 2.4 percent and comfortably within the RBA's long-term target band of 2 to 3 percent.
Wholesale inflation data released on Monday supported the case for monetary easing, showing the prices of final goods dropped 0.3 percent in the March quarter, well below analyst forecasts for an increase of 0.4 percent, and pointing to lower consumer prices in coming months.
The benchmark S&P/ASX 200 index ended down 14.1 points at 4,352.4. The index gained 1.0 percent last week.
New Zealand's benchmark NZX 50 index closed down 2.8 points at 3,513.5.
Turnover was thin ahead of a holiday-shortened week, at just 60 percent of average. Australian and New Zealand markets will be closed on Wednesday for the ANZAC Day public holiday.
"It's a short week, the overall moood is subdued," Chan said.
Shares in Spotless Group advanced 2.5 percent to A$2.46 after the business services group said it was still talking with suitor Pacific Equity Partners, and had yet to reach a conclusion.
Spotless said PEP had finished looking at Spotless's books and had worked on securing financing for a deal, but the two sides were still discussing a deal that could win board approval.
Shares in Cockatoo Coal slumped 7.3 percent after South Korea's SK Networks Co Ltd decided not to buy a 40 percent stake in Cockatoo, after an internal review.
Shares in Biota Holdings dived 9 percent after the flu drugmaker agreed to take over US firm Nabi Biopharmaceuticals to create a $258 million group and move to the United States, where investors value biotech research more highly than in Australia.
Biota shares fell A$0.085 to A$0.86. If the deal is approved by shareholders and regulators, Biota will be delisted from the ASX and the new company will be listed on NASDAQ. The company said its plan was the best option as an IPO on the NASDAQ carried too many risks in the current environment.
Comments
Comments are closed.