The local share market has dropped ahead of another monthly United States inflation readout tonight seen as crucial for determining whether the Fed will hike rates again this year.
The benchmark S&P/ASX200 index on Wednesday closed down 53 points lower at 7,153.9, a 0.74 per cent fall, while the broader All Ordinaries dropped 57.2 points, or 0.77 per cent, to 7,345.7.
Consensus expectations are for the US headline consumer price index (CPI) to show core inflation at 3.6 per cent for the year to August, up from 3.2 per cent a month ago.
"This is a fairly big jump in comparison to July's number and traders are nervous about this," said Naeem Aslam, chief investment officer of Zaye Capital Markets.
"The fact that there could be another interest rate hike by the Fed next month is keeping traders very nervous and it is in this context that today’s US CPI is of high importance."
A readout close to 3.1 per cent would likely lead to a stock market rally, but if inflation comes in hotter than 3.6 per cent, "then all bets will be off" and there would be a serious sell-off, Mr Aslam predicted.
Apple's new iPhone launch - of all things - may have contributed to a drop in sentiment. The world's largest company kept its prices mostly unchanged during the iPhone 15 unveil, possibly out of concern consumers could not absorb higher prices.
"Who would have thought that an Apple product launch could scuttle your portfolio? That's what happened today, or at least in part," Capital.com senior market analyst Kyle Rodda said.
Nine of the ASX's 11 sectors finished in the red on Wednesday, with utilities and energy slightly higher, the latter as Brent crude prices rose above $US92 a barrel for the first time since last November.
Woodside gained 0.4 per cent to $37.85 and Santos added 0.3 per cent to $7.74.
Elsewhere there were mostly losses, with tech the biggest loser following the Apple event, sliding 1.6 per cent. Xero fell 1.9 per cent and Nextdc dropped 2.2 per cent..
In the heavyweight mining sector, BHP fell 0.9 per cent to $43.80, Fortescue dropped 1.8 per cent to $19.60 and Rio Tinto retreated 0.6 per cent to $113.39.
Liontown added 1.0 per cent to $3.03 after awarding a $100 million contract to Monadelphous for nine months of steel piping work at its Kathleen Valley Lithium Project in WA. It's the last major construction contract for the major lithium mine and adds to confidence that Kathleen Valley will begin production in mid-2024.
Monadelphous finished up 1.4 per cent to $14.21.
The Big Four banks were mixed, with ANZ gaining 0.2 per cent to $25.33 but there were losses for the other three.
NAB dropped 0.5 per cent to $28.98, CBA fell 0.4 per cent to $101.70 and Westpac finished 0.3 per cent lower at $21.49.
Qantas finished 0.2 per cent lower at $5.57 after the High Court upheld a Federal Court ruling that the airline's sacking of 1600 baggage handlers, cleaners and ground staff early in the pandemic was unlawful.
Starpharma was up 23.1 per cent to 16c after a reformulation of a widely used anti-cancer drug, Camptosar, using Starpharma's nanoparticle technology showed promising results in a stage 1/2 clinical trial.
The Australian dollar was buying 64.10 US cents, from 64.27 US cents at Tuesday's ASX close.
ON THE ASX:
* The S&P/ASX200 index finished Wednesday down 53 points, or 0.74 per cent, at 7,153.9.
* The All Ordinaries dropped 57.2 points, or 0.77 per cent, to 7,345.7.
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 64.10 US cents, from 64.27 US cents at Tuesday's ASX close
* 94.42 Japanese yen, from 94.44 Japanese yen
* 59.66 Euro cents, from 59.94 Euro cents
* 51.45 British pence, from 51.46 British pence
* 108.67 NZ cents, from 108.78 NZ cents
