Australian Shares Slump as Real Estate and Discretionary Stocks Fall
Australian shares declined for the second consecutive day, with real estate and discretionary stocks leading the losses. Investors are scaling back expectations for a rate cut from the Reserve Bank of Australia following a sharp rise in third-quarter inflation.
Australian SharesReal EstateDiscretionary StocksInflationReserve Bank Of AustraliaReal EstateOct 30, 2025
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.
Frequently Asked Questions
What caused the decline in Australian shares?
Australian shares declined due to losses in real estate and discretionary stocks, and investors scaling back expectations for a rate cut from the Reserve Bank of Australia after a sharp rise in third-quarter inflation.
What was the impact of the third-quarter inflation spike on investor expectations?
The third-quarter inflation spike, which saw a 1.3% rise, led investors to scale back expectations for a rate cut, with the market almost fully pricing in a hold on the 3.60% cash rate by the Reserve Bank of Australia.
Which sectors were the biggest losers in the Australian market?
Real estate and discretionary stocks were the biggest losers, with real estate stocks falling 2.8% and discretionary stocks declining 2.4%. Notably, JB Hi-Fi saw a significant drop of 7.4%.
How did Woolworths and Coles perform in the consumer staples sector?
Woolworths gained, helping to cap losses in the consumer staples sector, while Coles fell to a two-month low despite a rise in first-quarter sales revenue.
What was the performance of energy and banking sectors?
Energy stocks rose 0.7% on higher oil prices, and banks gained 0.2%, bucking the negative trend in the broader market.
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