Real estate, discretionary stocks drag Australian shares for second straight session

Oct 30 (Reuters) – Australian shares fell on Thursday, dragged by real estate and discretionary stocks, while investors scaled back rate cut hopes from the country's central bank next week after a sharp third-quarter inflation spike on Wednesday. The S&P/ASX 200 index slipped 0.3% to 8,898.30 points by 0003 GMT. The benchmark closed nearly 1% lower on Wednesday. Data on Wednesday showed Australia's consumer price index (CPI) rose 1.3% in the third quarter, topping forecasts of a 1.1% increase as housing and travel costs climbed. Markets have almost fully priced in the probability of a hold on the 3.60% cash rate by the Reserve Bank of Australia next week, with less than 7% of investors expecting a rate cut. The RBA is set to decide on the cash rate on November 4. Real estate stocks extended losses for a second consecutive day, falling 2.8%, dragged by a 4.3% fall in peer Stockland Corporation. Discretionary stocks declined 2.4%, weighed down by a fall of as much as 7.4% in electronics retailer JB Hi-Fi . The firm fell to a near three-month low and was among the top losers on the benchmark as it posted a significant sequential slump in first-quarter sales growth in its Australia and New Zealand segments. The consumer staples sub-index edged 0.2% higher, with gains in grocer Woolworths capping losses in smaller rival Coles. Coles fell to over a two-month low even as the firm posted a rise in first-quarter sales revenue, with analysts at Jefferies noting that Woolworths "may have begun to close the gap to COL from late in Q1, when it took action to invest in value and upweight inventory levels." Bucking the negative trend, energy stocks rose 0.7% on higher oil prices, while banks gained 0.2%. New Zealand's benchmark S&P/NZX 50 index was flat at 13,409.20 points. (Reporting by Shivangi Lahiri in Bengaluru; Editing by Alan Barona)

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