Shares' rally fades as hot price growth dampens mood
Eight of 11 local sectors have finished the day higher despite a jump in headline inflation. -AAP Image
An early rally in Australian shares has faded by the close, after a hotter-than-expected inflation print weighed on the outlook for borrowing costs.
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The S&P/ASX200 eased from an almost 100-point rally to close 60.3 points higher on Wednesday, up 0.71 per cent to 8,597.3, as the broader All Ordinaries gained 66.1 points, or 0.75 per cent, to 8,890.3.
Morning exuberance quickly turned to caution after headline inflation jumped to 3.8 per cent in the year to October, well above consensus and Reserve Bank forecasts.
A 1.7 per cent surge in raw materials stocks led eight of 11 local segments higher, but an early 1.2 per cent upswing in the heavyweight financials sector eroded to a meagre 0.3 per cent gain by the close, capping broader upside.
The Australian dollar is buying 65.02 US cents, up from 64.58 US cents on Tuesday at 5pm, rising as interest rate markets pivoted towards potential rate hikes in 2026.
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