The local share market has finished slightly lower amid signs traders were selling Australian banking stocks at multi-year highs to move into the beaten-down mining sector
Significant stimulus measures enacted this week by China were behind the boost to the major miners, as the liquidity injections into the world's second-biggest economy sent metals prices soaring.
Beijing's stimulus package also boosted Australia's currency, with the Aussie briefly climbing above 69 US cents for the first time in 19 months. It was still hovering just under that level by late afternoon.
Official statistics also revealed that Australia's inflation last month cooled to its lowest level in 36 months, opening the door for a possible Christmas time interest rate cut by the Reserve Bank.
Still the benchmark S&P/ASX200 index finished lower for a third-straight day on Wednesday, dropping 15.6 points, or 0.19 per cent, to 8,126.4.
The broader All Ordinaries fell 12.4 points, or 0.15 per cent, to 8,372.7.
The inflation readout revealed consumer prices rose just 2.7 per cent in the year to August, down from 3.5 per cent for the 12 months to July and the lowest reading since August 2021.
IG market analyst Tony Sycamore said that if the report was replicated by more comprehensive quarterly CPI data to be released on October 30, it would open the door for a dovish pivot by the Reserve Bank in November and a rate cut in December.
Betashares chief economist David Bassanese said the readout was encouraging and offered a "glimmer of hope on rates" but agreed the quarterly CPI report would be key.
Seven of the ASX's 11 sectors finished lower on Wednesday, with property flat and energy, consumer staples and materials higher.
The materials/mining sector was the biggest mover, rising 2.9 per cent after the governor of China's central bank announced plans to lower borrowing costs and inject more funds into the economy
Jonathan Pines, head of Asia excluding Japan at investment bank Federated Hermes, said investors had been waiting a year for the "bazooka" that would revive China's economy.
"This multifaceted, strong new approach at the very least underlines the government's seriousness in tackling the problem," he said.
The measures sent iron ore prices heading back to $US100 a tonne, with copper and other metals also surging.
BHP rose 3.8 per cent to $42.70, Fortescue added 4.7 per cent to $18.85 and Rio Tinto climbed 3.8 per cent to $120.85.
Lithium miners and goldminers also gained, with Pilbara climbing 1.4 per cent and Evolution rising 1.8 per cent, while rare earth miner Lynas advanced 4.3 per cent and Mineral Resources added 5.4 per cent.
On the flip side, the heavyweight financial sector was well in the red, a possible indication that traders were rotating out of banks and into the miners, a reverse of a thematic that earlier played out for much of the year.
All four big banks lost ground, with NAB dropping 2.7 per cent to $37.48, CBA retreating 2.3 per cent to $134.89, ANZ falling 1.1 per cent to $30.78 and Westpac dipping 0.8 per cent to $32.55.
Elsewhere, Premier Investments was the worst performer in the ASX200, falling 9.1 per cent to a six-week low of $30.61 after the Just Jeans, Peter Alexander and Smiggle owner reported its full-year profit was down four per cent to $261 million.
"FY24 has been another challenging year for discretionary retail," said chairman Solomon Lew.
Close to 5pm, the Australian dollar was buying 68.81 US cents, from 68.31 US cents at Tuesday's ASX close.
ON THE ASX:
* The benchmark S&P/ASX200 index finished Wednesday down 15.6 points, or 0.19 per cent, at 8,126.4
* The All Ordinaries dropped 12.4 points, or 0.15 per cent, at 8,372.7.
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 68.31 US cents, up from 68.31 US cents at Tuesday's ASX close
* 98.77 Japanese yen, from 98.64 Japanese yen
* 61.48 euro cents, from 61.45 euro cents
* 51.35 British pence, from 51.14 pence
* 108.77 NZ cents, from 108.95 NZ cents
