The S&P/ASX 200 edged 0.1% lower to finish at 8,934 on Wednesday, reversing gains in the morning session to snap a three-day winning streak, after a hot inflation print boosted bets of near-term interest rate hikes. Data showed annual inflation rose to 3.8% in December, above the expected 3.6% and November’s 3.4%, while monthly inflation also exceeded expectations at 1.0% from 0.7%. The quarterly trimmed mean inflation, closely monitored by the RBA, also came in at 0.9%, slightly below last month but still above expectations. Traders ramped up the probability of a quarter-point hike at the RBA February 3 meeting to above 70%, up from around 60% before the release. Rate-sensitive sectors retreated, including real estate and consumer discretionary stocks. Financials also ended 0.3% lower, with three of the four largest banks trading in the red. Meanwhile, commodity-linked stocks limited the losses, with energy and gold shares up over 2% each. Heavyweight miners also advanced 1.5%.
