Australian shares dip as RBA signals possible rate hike amid worsening inflation outlook

Australian equities retreated on Wednesday, with the S&P/ASX200 down 16.4 points to 8,800.5 and the broader All Ordinaries off 18.5 points to 8,925.7. The move came after Reserve Bank of Australia deputy governor Andrew Hauser told investors that the inflation outlook was materially worse than previously projected and that businesses were beginning to accept 3.5% inflation as a new baseline. Betashares chief economist David Bassanese argued that the central bank had lost patience and might risk a recession to curb price growth, suggesting the market was undervaluing the chance of a rate hike at the November 3 meeting.

The technology sector suffered the biggest decline, falling 3.7% after data-centre operator NextDC plunged 38.7% to an eight-year low following a $140 million earnings hit from power-supply problems. Mining stocks fell modestly, while the big four banks mostly edged higher, except for ANZ, which slipped slightly.