Banking stocks take dive on share market after Consumer Price Index falls by 0.2pc

Banking and finance stocks have bore the brunt on big falls on the share market after the Consumer Price Index fell by 0.2 per cent — not what everyone expected.

The news lifted expectations the RBA will cut interest rates when it meets next week and sent the dollar sharply downward.

The sharemarket rose on the news before falling as well.

The All Ordinaries closed 32 points lower to 5,250 and the ASX 200 lost the same amount to close at 5,187.

The banking and finance sector was down almost 2 per cent and the Commonwealth Bank lost $1.86 to $73.76.

Westpac fell 64 cents to $30.94, ANZ lost 37 cents to $23.88, while NAB lost 60 cents to $26.90.

Farmers' milk prices on the line

Murray Goulburn has issued a profit warning and said it would cut milk prices paid to farmers. Managing director Gary Helou is also leaving the company. Shares plunged 90 cents to $1.24.

And at the other end of the scale, Premier Investments retail chief Mark McInnes received a big pay rise, so things must be going well. Shares lifted 16 cents to $15.64.

In commodities, oil is higher at $US42.34 a barrel while iron ore is weaker at $US64.10 a tonne. Gold is a little stronger at $US1,244 an ounce.

The Australian dollar has lost more than 1.5 cents against the US, buying 76.2 US cents.

Source: ABC News

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