The S&P/ASX 200 index extended its losing streak to eight sessions on Thursday, closing down 0.24% at 8,665.8. The decline, which saw the index briefly fall as much as 0.5% during the day, was driven by losses in mining and consumer staple stocks, largely offsetting gains in the financial and energy sectors.
Inflation Data Raises Rate Hike Fears
The market's downturn came a day after the Australian Bureau of Statistics reported that the Consumer Price Index rose 4.6% year-over-year in March, accelerating from 3.7% in February. The trimmed mean inflation rate, which excludes volatile items, remained steady at 3.3%, still above the Reserve Bank of Australia's target band of 2% to 3%. Traders are now closely watching the RBA's monetary policy decision scheduled for May 5, with Commonwealth Bank assigning a 70% probability of a 25-basis-point rate hike. CBA senior economist Trent Saunders noted that "the inflation problem has not yet been solved," adding that the outcome is a close call. The bank continues to see the cash rate reaching 4.35%.
Oil Shock Boosts Energy Stocks
Adding to market jitters, crude oil prices surged to around $126 per barrel, reaching levels not seen in four years. The spike, driven by escalating tensions in the Middle East, has raised concerns about fuel and freight costs across the economy. In response, energy stocks outperformed, gaining 1.4%, while the broader market struggled.
Woolworths Profit Warning Hits Consumer Staples
Woolworths Group, one of Australia's largest retailers, issued a stark warning on its fiscal 2026 Australian Food earnings outlook, citing higher fuel expenses and increased spending to retain customers. The company's shares dropped as much as 9.8% at the open. CEO Amanda Bardwell indicated that "early signs" from the Middle East conflict were beginning to affect both customers and employees. The consumer non-cyclicals sector, which includes supermarkets and household essentials, slumped 4.6%, while materials shed 2.6%.
Mixed Performance Across Sectors
Mining stocks were under pressure, with base metals losing ground. BHP Group, Rio Tinto, and Fortescue each fell between 1.4% and 1.6% earlier in the session, though Mineral Resources bucked the trend by gaining after raising its 2026 production forecast. Financials provided some support, climbing 0.54% as the big four banks advanced between 0.3% and 1.1%. Gold stocks slipped as bullion prices fell further overnight after the Federal Reserve held interest rates steady.
ASX Ltd Names Interim CEO
ASX Ltd shares rose approximately 5%, making it one of the top performers on the ASX 200. The exchange operator announced that Darren Yip, currently group executive for markets and listings, will serve as interim chief executive from May 29 while the board continues its search for a permanent replacement.
Market Outlook
Analysts remain divided on the near-term direction. IG's Tony Sycamore suggested that a drop in fuel prices could open the door for the RBA to pause, while CBA chief economist Luke Yeaman noted that the Iran conflict holds potential for escalation, impasse, or peace. A faster resolution in oil markets would ease rate hike pressures, but a prolonged shock could continue to weigh on retailers, miners, and households. The Australian dollar was trading near 71.17 U.S. cents. Over the past five sessions, the ASX 200 has fallen 1.5%, but remains nearly flat for the year as it navigates pressures from rising oil, persistent inflation, and an uncertain interest rate decision.
