Australian shares dropped on Thursday as a drag in financials weighed on the index, while investors globally awaited the US inflation print for more cues on the trajectory of rate hikes.

The S&P/ASX 200 index fell 0.2% to 7,323.1-points by 0030 GMT.

The benchmark ended 0.4% higher on Wednesday.

Investors globally are being cautious ahead of key US inflation data, which is scheduled to be released later in the day. Markets are viewing the data as a key indicator for assessing the path of rate hikes in future.

The New York Federal Reserve Bank said credit cards debt surpassed $1 trillion, and Philadelphia Fed President Patrick Harker said the US central bank may be at the stage where it can leave interest rates unchanged.

Meanwhile, China’s consumer prices dropped in July for the first time since February 2021, while factory-gate prices continued their drop as lacklustre demand weighed on the economy.

On the local bourse, financials took a hit and fell 0.7%.

All the “Big Four” banks toppled between 1.3% and 0.5%. QBE Insurance fell 4% after it missed expectations for its first-half earnings as it incurred a higher-than-expected effective tax rate for the period.

Tracking Wall Street lower, Australian tech stocks toppled 1.7% with shares of Block Inc in negative territory.

Australian shares end higher aided by upbeat CBA results

Bucking the trend, energy stocks rose 2% as oil prices hit fresh peaks after a steep drawdown in US fuel stockpile and Saudi and Russian output cuts offset.

AMP reported a marginal fall in its half-yearly profit, pushing shares of the wealth manager to the bottom of the benchmark.

Boral emerged among top gainers after the building materials maker forecast an improvement in its fiscal 2024 earnings.

New Zealand’s benchmark S&P/NZX 50 index was flat at 11,835.94 points.