ASX extends losing streak as inflation jumps; G8 Education slumps

The Australian sharemarket closed lower for the seventh session in a row after the latest inflation figures – while not as bad as feared – came in close to a three-year high and bolstered bets for further rate hikes by the Reserve Bank.

The S&P/ASX 200 finished down 23.7 points, or 0.3 per cent, to 8687, with six of 11 industry sectors in the green as investors digested the data release from the Australian Bureau of Statistics in late morning trade. The Australian dollar dropped 0.3 per cent to US71.62¢.

According to the ABS, inflation hit 4.6 per cent in March after sitting at 3.7 per cent in February. While market economists had tipped an annual rate of 4.8 per cent, the reading remains above the top of the RBA’s 2 to 3 per cent target range as higher fuel costs from Middle East supply disruptions compounded already elevated price pressures to keep policymakers on a tightening path.

The rise was largely due to a 32.8 per cent spike in petrol prices, the single-largest monthly increase since the bureau started tracking monthly inflation in 2017. However, underlying measures of inflation – closely tracked by the RBA, which meets next week – showed a “moderate” increase of 0.3 per cent. Trimmed underlying inflation was at 3.3 per cent, where it had been last month.

“Oil price shocks are a central bank’s worst nightmare,” said Harry McAuley, an economist for Oxford Economics Australia. “They simultaneously boost prices and crunch demand – a combination that puts the board between a rock and a hard place in achieving its dual mandate of price stability and full employment.”

Earlier this month, RBA deputy governor Andrew Hauser warned rates in Australia need to be set at a level consistent with returning inflation to target, describing it as “too high”.

Oil was steady during the session as investors focused on the next steps for peace talks over the Iran war, with the near-closure of the crucial Strait of Hormuz prolonging disruptions that have upended global markets.

Brent traded near $US111 a barrel after rising 2.8 per cent overnight, and West Texas Intermediate traded above $US99. President Donald Trump said Iran has asked the US to lift a naval blockade of the strait while the two sides negotiate an end to hostilities that have choked off energy supplies.

Local oil stocks rose, with Woodside Energy up 2 per cent after it told investors it was set to cash in from surging oil and gas prices as the Middle East conflict chokes the world’s oil supplies and ignites a scramble for spare cargoes. The company’s average prices rose 11 per cent in the first quarter, but were on track to jump further after Iran’s closure of the strait and missile strikes on a Qatari gas hub knocked out up to one-fifth of global liquefied natural gas (LNG) supplies last month. “Further benefits of currently higher spot prices will be realised in subsequent quarters for LNG due to lagged contract pricing,” Woodside chief Liz Westcott said.

Santos added 0.4 per cent and Ampol was up 0.9 per cent, while fellow fossil fuel producers Yancoal and Whitehaven Coal jumped 3 per cent and 2.9 per cent, respectively.

Childcare operator G8 Education tumbled 31.3 per cent after it announced it was closing 40 childcare centres across the country as it grapples with falling occupancy numbers. One in 10 of its centres will shut down with the company saying in a statement the childcare sector, which has been embroiled in scandal, is facing a number of challenges.

“Occupancy across the sector is lower compared to 2024 and 2025 due to families experiencing sustained affordability pressures, falling birth rates, increased long-day care supply and confidence being impacted by serious child safety incidents,” G8 said.

Financial stocks were mixed. The ANZ Bank added 0.4 per cent but the Commonwealth Bank (-1.4 per cent), National Australia Bank (-1.2 per cent) and Westpac (-1 per cent) were all in the red.

Mining stocks were also lacking clear direction, with BHP falling 0.9 per cent and Rio Tinto down 0.8 per cent, while Fortescue extended Tuesday’s gains by 0.6 per cent. The price of iron ore slid lower overnight and lost further ground to trade at $US105.75 per tonne in Singapore.

Outdoor advertising company oOh!media jumped 32.9 per cent after it received an unsolicited, non-binding proposal from Pacific Equity Partners to acquire the company in a deal valuing it at about $754 million.

Technology stocks were mostly lower after weakness in the sector on Wall Street overnight, however high-frequency radio and satellite communications specialist Codan soared 15.5 per cent after saying business was “above expectations” and it would boost profits by 60 per cent this year. Other tech stocks traded lower, with WiseTech Global down 2.2 per cent and data centre operator NextDC down 2.9 per cent, following losses by US tech stocks after a report in The Wall Street Journal said some leaders at OpenAI are concerned about whether it can support its massive spending on data centres after missing targets for new users and revenue.

On Wall Street overnight, the tech sell-down weighed down the wider market. The S&P 500 fell 0.5 per cent from its latest all-time high. The Dow Jones dropped 0.1 per cent, while the Nasdaq composite fell 0.9 per cent from its own record.

Stocks in the artificial intelligence industry led the way lower. Chip company Broadcom was the heaviest weight on the S&P 500 after sinking 4.4 per cent. Drops of 1.6 per cent for Nvidia and 3.9 per cent for Micron Technology also undercut the market. Elsewhere, Elon Musk’s blockbuster civil trial began in California.

The drops came just a day before several of the biggest spenders on AI are scheduled to report their latest results for the start of 2026. They could offer more clues on whether all the investment in AI is producing the kind of returns that shareholders care about.

Alphabet, Amazon, Meta Platforms and Microsoft are all reporting their latest quarterly results on Wednesday [early Thursday AEST].

At the same time, the Federal Reserve is set to announce its latest decision on short-term interest rates. The widespread expectation is that it will hold the federal funds rate steady and hold off on resuming its cuts. Lower interest rates would help the economy, but they also risk worsening inflation when oil is expensive and tariffs are threatening to push prices higher.

Also on Wednesday US time, the Senate Banking Committee will vote on whether to confirm US President Donald Trump’s nominee, Kevin Warsh, to succeed Fed chair Jerome Powell. The committee is expected to approve Warsh and send his nomination to the full Senate.

With AP, Bloomberg

The Market Recap newsletter is a wrap of the day’s trading. Get it each weekday afternoon.