Australian Markets Edge Lower After Inflation Data

Australian markets fell notably after data showed consumer inflation in the country rose to a six-month high in May, increasing the odds of an RBA rate hike in August.

Australia inflation accelerated more than expected in May, suggesting the Reserve Bank will remain hawkish at the August meeting. Consumer price inflation rose to 4.0 percent in May from 3.6 percent in April, the Australian Bureau of Statistics reported Wednesday. Inflation was expected to rise to 3.8 percent.

At the same time, core inflation that excludes volatile items and holiday travel also came in at 4.0 percent but it came down from 4.1 percent in April. Annual trimmed mean inflation accelerated to 4.4 percent in May from 4.1 percent in April.

The benchmark S&P/ASX 200 dropped 0.71 percent to 7,783, dragged down by mining and financial stocks. The broader All Ordinaries index finished 0.67 percent lower at 8,022.90.

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