New Zealand shares pared gains to end marginally up on Wednesday after the country’s central bank raised interest rates by another half a percentage point, while Australian stocks ended higher as markets awaited key US inflation data.

The S&P/NZX 50 closed 0.1% higher at 11,110.33 points, after gaining as much as 0.4% before the rate decision.

The Reserve Bank of New Zealand hiked its cash rate for the sixth consecutive time and signalled it remained comfortable with its planned aggressive tightening path.

The hike was widely priced in and analysts at ANZ Research called the market reaction to the decision “very muted”.

“Decisions are likely to get harder over the second half of the year as evidence mounts that tightening financial conditions are indeed dampening demand,” they added.

In Australia, the resources-heavy S&P/ASX 200 ended 0.2% higher at 6,621.60 points. Miners declined 0.6% and hit an eight-month low as iron ore prices fell due to demand concerns in top steel producer China, where unfavourable weather in several cities and COVID-19 curbs persist.

Sector behemoths BHP and Rio Tinto shed 1.4% each, while Fortescue Metals rose 0.6%.

“Right now, the biggest risk for the Australian market is declining metal prices and the strengthening US dollar,” said Kunal Sawhney, chief executive officer of Kalkine Group.

Weakness in overnight oil prices dragged energy stocks 1.8%, with Woodside Energy and Santos retreating 2.9% and 1.3%, respectively. Financials advanced 0.7% to offset losses.

The major lenders Commonwealth Bank of Australia, National Australia Bank and Westpac gained between 0.3% and 1.1%, while Australia and New Zealand Banking Group lost 1.2%.

Australian shares subdued as investors await US inflation data

Meanwhile, investors were watching out for US inflation data which might provide signs to the Federal Reserve on how to continue its aggressive approach to raising rates.

The Fed hiked rates by a super-sized 75 basis points at its last meeting.