Australian shares fell to a three-week low on Wednesday, dragged down by heavyweight financial stocks, as investors awaited April consumer inflation numbers to gain more clarity on the monetary policy path.

The S&P/ASX 200 index was down 0.7% at 7,711.50 by 0039 GMT.

The benchmark closed 0.3% lower on Tuesday.

Data on Tuesday showed that Australian retail sales grew in April, albeit at a very slow pace, indicating that consumers were spending less amid high borrowing costs and rising rents.

Investors were awaiting the April inflation reading due at 0130 GMT, wherein analysts expect only a small dip in annual inflation to 3.4% from 3.5% in March, according to a Reuters poll.

Rate-sensitive financials dropped 1%, with the “Big Four” banks down between 1.1% and 1.4%. Mining stocks fell a marginal 0.1%.

Iron ore major Fortescue dropped as much as 3.3% and Rio Tinto retreated 1.1%.

BHP Group, the world’s largest listed miner, was largely flat, ahead of a 1600 GMT deadline to either table a firm offer for smaller British rival Anglo American or walk away for six months.

Technology and healthcare stocks were also trading in negative territory, falling 0.5% and 0.7%, respectively.

Australian shares hit record high; RBA cautious on inflation

Bucking the trend, gold stocks advanced 0.4% after bullion prices gained on Tuesday, helped by a weaker dollar ahead of US inflation data due later this week.

Energy stocks rose 0.1% after oil prices gained more than $1 per barrel on expectation that OPEC+ will maintain crude supply curbs at its June 2 meeting.

New Zealand’s benchmark S&P/NZX 50 index was up 0.4% at 11,731.45 after three straight sessions of losses.