The Australian share market has suffered its third straight day of losses as traders wait with bated breath for the Federal Reserve's next move.
The benchmark S&P/ASX200 index on Wednesday finished down 33.3 points, or 0.46 per cent, to 7,163.3, while the broader All Ordinaries dropped 33.1 points, or 0.45 per cent, to 7,361.9.
"Appetite for risk was understandably in short supply across markets today, with investors unsure of which side of the hawkish/dovish ledger the Fed will land on at the policy meeting with regards to rhetoric," said Tim Waterer, chief market analyst at KCM Trade.
Virtually no one expects the Fed to announce a change in interest rates at its policy meeting, with the decision to be revealed during Australia's pre-dawn hours on Thursday.
But Mr Waterer said market attention would be focused squarely on the Fed's forward guidance against the backdrop of escalating energy prices.
If Fed chairman Jerome Powell emphasises the risk to inflation from rising oil prices, the US dollar and Treasury yields are set to extend their recent gains, Mr Waterer said.
But if the Fed glosses over the impact of oil prices and doesn't foreshadow a potential November rate hike, it will be risk assets that benefit.
Overnight, Statistics Canada reported that consumer prices rose in that country at their highest rate since April, driven by a big increase in petrol prices.
But in the United Kingdom, the Office for National Statistics reported on Wednesday that inflation unexpectedly eased in August, even as fuel prices rose sharply for motorists.
Three of the ASX's 11 sectors gained ground, financials were basically flat and seven sectors finished in the red.
Energy was the biggest loser, dropping 1.8 per cent as oil prices eased for the first time in eight days, with Brent crude changing hands for just under $US94 a barrel after coming close to breaking $US95 on Tuesday.
Woodside dropped 2.1 per cent to $37, Santos fell 1.9 per cent to $7.70 and coalminer New Hope retreated 2.4 per cent to $6.15.
The iron ore giants were all lower with BHP dropping 1.0 per cent to $44.64, Fortescue falling 1.7 per cent to $20.61 and Rio Tinto dipping 1.3 per cent to $117.03.
In the heavyweight financial sector, the Big Four banks were mixed while insurance companies gained ground.
Westpac dropped 0.7 per cent to $21.53, CBA dipped 0.3 per cent to $101.84, while ANZ edged 0.1 per cent higher at $25.54 and NAB was basically flat at $29.39.
Among insurers, IAG added 1.9 per cent to $5.88, Suncorp rose 1.0 per cent to $14.15 and QBE gained 1.1 per cent to $15.42.
In the consumer discretionary sector, KMD Brands dropped 4.6 per cent to 73.5c after the Kathmandu, Rip Curl and Oboz footwear owner announced its net profit fell 0.6 per cent to $NZ36.6 million ($A33.7 million) in 2022/23.
"The fourth quarter for Kathmandu was more challenging with increased cost-of-living pressures softening consumer sentiment, and the warmest winter on record in Australia, which cycled the best-ever winter trade season last year," CEO and managing director Michael Daly said.
The Australian dollar was buying 66.55 US cents, from 64.30 US cents at Tuesday's ASX close.
ON THE ASX:
* The S&P/ASX200 index finished Wednesday down 33.3 points at 7,163.3, a drop of 0.46 per cent.
* The All Ordinaries fell 33.1 points, or 0.45 per cent, to 7,361.9.
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 64.54 US cents, from 64.33 US cents at Tuesday's ASX close
* 95.47 Japanese yen, from 95.07 Japanese yen
* 60.43 Euro cents, from 60.24 Euro cents
* 52.10 British pence, from 51.96 British pence
* 106.68 NZ cents, from 108.66 NZ cents
The Australian dollar was buying 64.56 US cents, from 64.30 US cents at Tuesday's ASX close.
