ASX 200 Holds Firm as Inflation Eases into RBA Target Range

Highlights:

• Core inflation returns within the Reserve Bank’s preferred range, easing policy tension

• ASX 200 maintains modest gains as rate-sensitive sectors show resilience

• Small cap movers led by lithium and agriculture stocks on corporate updates

The Australian share market was steady through midday trading, with the ASX 200 index showing modest gains. Investor sentiment remained cautious following new inflation data that showed core consumer prices returning to the Reserve Bank of Australia’s preferred range. While headline inflation edged slightly higher than expected, core inflation fell into the two to three range for the first time in several years.

Market participants observed increased pricing activity in interest rate-sensitive assets following the inflation data. The Australian dollar saw a minor uptick, and government bond yields moved slightly higher, indicating a shift in expectations around monetary policy direction. Despite mixed reactions, money markets remained aligned with speculation of a rate adjustment in the near term.

Sector Movement: Tech Holds, Utilities Slide

Within the ASX 200, performance varied across different sectors. Technology-related names held up, supported by expectations of a more accommodative policy environment. Defensive sectors, however, faced downward pressure. Utility stocks were among the weakest performers, with Origin Energy (ASX:ORG) registering a notable decline.

Meanwhile, energy sector news included an agreement between Woodside Energy Group (ASX:WDS) and BP for long-term gas supply linked to a major United States-based LNG development. Despite the magnitude of the deal, shares in WDS saw a mild pullback.

Large Cap Activity Driven by Resource Stocks

Resource sector names were in focus on the back of production and operational updates. Ora Banda Mining (ASX:OBM) declined following a revision to its production expectations for the upcoming fiscal year. Champion Iron (ASX:CIA) also fell, despite reporting strong sales in the March quarter. Alcoa Corporation (ASX:AAI) noted operational disruptions in Europe, which appeared to weigh on local trading sentiment.

ASX Small Cap Winners: Agriculture and Lithium in the Spotlight

Among small cap stocks, gains were led by Wide Open Agriculture (ASX:WOA), which announced an international distribution agreement with a major global partner. The agreement centres on lupin-based protein exports into China and has been viewed as a step toward broader international reach for WOA’s food technology platform.

Arizona Lithium (ASX:AZL) was also among the strongest performers after confirming development approvals for its Prairie Project in Canada. The company detailed upcoming milestones, including facility construction and project funding. In addition, updates were provided regarding the redevelopment of its Big Sandy project in collaboration with a major shareholder.

ASX Small Cap Losers: Weakness Seen in Tech and Energy Juniors

Several small cap companies experienced marked declines, particularly among junior tech and energy explorers. Names such as Pointerra Limited (ASX:3DP), Thrive Tribe Technologies (ASX:1TT), and 88 Energy Ltd (ASX:88E) posted double-digit drops.

Lower liquidity and profit-taking were evident in segments where speculative momentum had previously driven activity. Resources companies also featured among the worst performers, including Helix Resources (ASX:HLX) and Blaze Minerals (ASX:BLZ), which closed significantly lower.

Key Corporate Updates in Focus

A number of corporate developments rounded out the trading session. Koba Resources (ASX:KOB) divested one of its uranium projects to refocus capital allocation toward its flagship asset in South Australia. Challenger Gold (ASX:CEL) reported that refurbishments to a processing facility remain on schedule, supporting future output from its Hualilan gold project in Argentina.

In the silver sector, Silver Mines (ASX:SVL) continued regulatory engagement for its Bowdens project. The company filed an application to determine infrastructure approval alignment under current planning rules.

In Chile, Hot Chili (ASX:HCH) received acknowledgment from local authorities for its copper-gold and water infrastructure projects. The company fulfilled the necessary requirements for entry into the national investment acceleration framework.