Australian shares inched lower on Thursday, led by the losses in mining and gold stocks, as high inflation and cash rate environment weighed on investor sentiment.

The S&P/ASX 200 index fell 0.1% to 7,360.1 by 0037 GMT. The benchmark ended up 0.1% on Wednesday. Wall Street ended little unchanged overnight post a slew of mixed earnings reports from big US companies.

In Sydney, miners were the top laggards on the benchmark due to a fall in iron-ore prices overnight. Mining behemoths BHP Group and Fortescue Metals fell 1.4% and 1.8%, 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 1.1% after the bullion lost shine as US yields rose.

Sector majors Newcrest Mining and Northern Star lost 1.8% and 1.7%, respectively. Energy stocks dropped 1.2% after oil prices fell 2% on fears of a potential rate hike by the US Federal Reserve.

Oil and gas majors Woodside Energy and Santos lost 1.5% and 1.7%, respectively.

Technology stocks capped gains on the benchmark, falling 0.1%. ASX-listed shares of Block Inc dropped 1.6%, while Megaport edged down 0.7%.

Capping losses, banks rose 0.6% as UK inflation data on Wednesday bolstered the case for future rate hikes from central banks, which is expected to aid local financials.

Australian shares edge lower as gold and energy stocks drag

All of the “Big Four” banks traded in the green. Real estate and healthcare stocks added 0.6% and 0.4%, respectively.

Lithium miner Allkem dropped 5.2% despite posting a higher revenue and improved production.

The local competition regulator blocked the acquisition of Alliance Aviation Services by bigger peer Qantas Airways.

Qantas was up 0.6%, while Alliance plunged more than 7%.

New Zealand’s benchmark S&P/NZX 50 index was down 0.2% at 11,897.