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Shares advance on steady inflation read

ASX Market Wrap
The Aussie sharemarket has bounced back. Picture: NCA NewsWire/ Gaye Gerard

Australian shares advanced on Wednesday as softer than anticipated inflation data bolstered investors’ hopes that the Reserve Bank is on track to cut interest rates this year.

At the closing bell, the S&P/ASX200 added 0.5 per cent, or 39.4 points, to reach 7819.6, while the All Ordinaries rose a similar amount to 8073.6.

The Australian dollar traded lower, buying US65.28c against the greenback.

Earlier on Wednesday, the Bureau of Statistics reported the consumer price index rose 3.4 per cent in February, a steady reading on results in December and January, and slightly softer than economists’ forecasts for a 3.5 per cent increase.

RBA PRESSER
Despite the softer-than-anticipated inflation reading, RBA governor Michele Bullock is likely to wait for further signs the economy is slowing before it moves to cut interest rates. Picture: NCA NewsWire / Jeremy Piper

Even as the result came in below expectations, Betashares chief economist David Bassanese said the reading had neutral implications for Australia’s interest rate outlook.

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“It is way too early to know whether inflation so far this year is continuing to trend down at a faster or slower pace than the RBA expects,” Mr Bassanese said.

Rather than the weaker than anticipated inflation read, Mr Bassanese said the recent jobs data, had a greater impact on the timing of interest rates.

“Likely more important to the near-term interest rate outlook was last week’s blockbuster labour market report, which erased the tentative signs of slowing employment growth around year end,” he added.

On the benchmark, nine of 11 industry sectors finished in the green, led by consumer staples up 1.4 per cent, as sector heavyweights Woolworths added 1.9 per cent to $33.01 and Coles rose 1.6 per cent to $16.88.

Westpac AGM
Westpac chief Peter King warned the bank’s tech systems overhaul faced potential cost blowouts. Picture: NCA NewsWire/Tertius Pickard

Meanwhile, tech stocks were the biggest laggards, dipping 0.5 per cent. Wistech shed 1.1 per cent to $93.28 while NextDC slipped 1.3 per cent to $17.58.

In corporate news, shares in Platinum Assets Management sank 21.1 per cent to $1.10, their biggest intraday loss since 2003.

The loss came after the money manager disclosed it had lost $1.4bn in mandated funds.

Westpac slipped 0.9 per cent to $26 after its chief executive admitted its multi billion dollar IT overhaul was facing potential cost blowouts.

Takeover target Southern Cross Media jumped 1.1 per cent to 95c as it farewelled its chair Rob Murray after he quit the board following demands for his removal by shareholder Spheria Asset Management.