February 14, 2018 / 1:39 AM / a month ago

Australia shares slip ahead of US inflation data; NZ follows suit

Feb 14 (Reuters) - Australian shares slipped on Wednesday, as gains in the healthcare and information technology sectors were overshadowed by losses in financials ahead of U.S. inflation data due later in the global day.

The S&P/ASX 200 index edged down 0.1 percent to 5,847.5 by 0050 GMT. The benchmark rose 0.6 percent on Tuesday.

The U.S. consumer price inflation number “is going to be the underlying driver” of the timing of the next U.S. rate rise, and it is “an absolute given that their trajectory is one of increasing rates,” said James McGlew, executive director of corporate stockbroking at Argonaut Ltd. in Perth.

For the Australian market, he said, increasing U.S. rates will put the focus on high yielding stocks and the financial index.

The Australian financial index slipped as much as 0.8 percent early on Wednesday, with Commonwealth Bank of Australia (CBA), which went ex-dividend on the day, down as much as 3.3 percent, weighing the most on the sector benchmark.

The financial index, which was the biggest drag on the main index, has a dividend yield of almost 8 percent, according to Thomson Reuters Eikon data. A U.S. rate hike mitigates the relative attractiveness of holding high dividend yielding Australian stocks.

“If the CPI data comes in benign or softer than the market is expecting, that would be positive for our financials and you would see them turn back again,” said Argonaut’s McGlew.

Materials rose with mining heavyweights BHP Billiton and Rio Tinto gaining about 0.5 percent and 0.4 percent, respectively.

Healthcare stocks gained the most, largely on account of CSL Ltd, which jumped as much as 6 percent after reporting a 35 percent jump in half-year profit.

New Zealand shares were on track to end Wednesday lower largely due to Fletcher Building Ltd.

New Zealand’s benchmark S&P/NZX 50 index fell 0.5 percent, or 43.22 points, to 8,079. Fletcher was down more than 11 percent.

Fletcher said its chairman would resign as the debt-laden construction firm hiked the provisions for losses in its commercial building unit. (Reporting by Aaron Saldanha in Bengaluru; Editing by Richard Borsuk)

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