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Australian equities drifted lower in early Thursday trade, with the ASX 200 hovering around 8,623 to extend losses for a fifth consecutive session and touch a five-week low. Risk appetite weakened after Canberra’s 2026 budget highlighted the potential for severe fallout from the ongoing fuel crisis, while its measures were seen as insufficient to fully insulate the economy.
Investor caution was also evident ahead of May inflation expectations data, following April’s jump to the highest level since late 2022. That surge reinforced signs of renewed cost pressures that have persisted since the second half of last year.
Downside pressure was partly offset by optimism that the upcoming meeting between U.S. President Trump and Chinese President Xi Jinping could help ease global trade tensions.
Sector-wise, commercial services, consumer non-durables, and healthcare stocks weighed on the index, while gains in consumer services helped limit the overall decline. The big four banks slipped between 0.2% and 1.7%. Other notable underperformers included Lynas Rare Earths Ltd. (-2.0%), Xero Ltd. (-1.3%), and PLS Group (-1.2%).
