Australian shares edge lower on banks, tech drag; CPI in focus

Australian shares dip: Australian shares ended marginally lower on Tuesday as losses in bank and tech stocks outweighed gains in commodity-linked shares, while investors remained cautious ahead of the domestic inflation print.

The S&P/ASX 200 index closed down 0.2 per cent at 8,071.20 points.

Rate-sensitve financials were the biggest drag on the index, losing 0.9 per cent with the "Big Four" banks down between 0.2 per cent and 1 per cent.

"The financial sector has slipped after spinning its wheels against resistance from its July record high of 8,176. Possibly, the lack of upside traction is a result of money leaking out of the big banks and into beaten-up mining stocks," said Tony Sycamore, a market analyst at IG Australia.

Sector performance divergence

Technology stocks closed 1.3 per cent lower tracking overnight losses on Wall Street, with Xero closing 2.2 per cent lower.

Mining stocks rose 0.9 per cent on the back of rising iron ore prices and upbeat earnings from BHP, whose shares rose 1.3 per cent on better-than-expected annual profit.

Energy stocks closed 2.3 per cent higher, boosted by Woodside Energy which gained 3.9 per cent after its half-yearly profit beat estimates.

Investors also cautiously awaited the domestic consumer price index data due on Wednesday, which could provide further cues on the Reserve Bank of Australia's monetary policy stance.

Fed rate cut watch

Additionally, traders are on the watch for the US inflation data due on Friday, which could cement a 25 basis point cut from the Federal Reserve next month.

"I think investors have universally priced-in for a September cut (from the Fed), so any major upside surprise could potentially disrupt this optimistic sentiment," said Glenn Yin, Head of Research and Analysis at AETOS Capital Group.

In corporate news, shares of grocer Coles closed 1.7 per cent higher on better-than expected annual profit.

New Zealand's benchmark S&P/NZX 50 index closed 1.1 per cent lower at 12,451.1.