ASX erases losses on more signs of easing inflation

The Australian share market has erased its earlier modest losses and moved ever-so-slightly into the green on signs that domestic inflation is easing, raising hopes that the Reserve Bank might cease its rate-hiking campaign.

At noon AEDT on Wednesday, the benchmark S&P/ASX200 index was up 3.2 points, or 0.05 per cent, to 7,037.3, while the All Ordinaries was up 4.7 points, or 0.07 per cent, to 7,224.1.

The ASX200 had been down as many as 23 points earlier in the morning but gained 15 points in the space of three minutes after the Australian Bureau of Statistics announced that consumer prices rose just 6.8 per cent in the year to February, compared to expectations of a 7.1 per cent jump. 

It's the second straight month of lower inflation, which eased to a 7.4 per cent annual rise in January after apparently peaking at 8.4 per cent in December.  

"If there were any doubts as to whether the RBA will pause next week, today's inflation report surely confirms that they will," wrote City Index senior analyst Matt Simpson in a note.

"Given the RBA's dovish hike, comments of a pause from Governor (Phil) Lowe and the discussion of it within the March minutes, the RBA have all the reasons they need to chill out, hold rates steady and assess incoming data."

The ASX's 11 official sectors were mixed at midday, with seven up and four down.

Energy was the biggest gainer, climbing 1.2 per cent as oil prices edged higher, to $US79 a barrel.

Woodside had gained 1.8 per cent to $33.55, Santos had added 0.6 per cent to $6.99, and Beach Energy was up 1.4 per cent to $1.405.

Coalminers New Hope and Whitehaven were both down, however, by 2.0 and 1.7 per cent, respectively.

The heavyweight mining sector was also up by over one per cent, with BHP climbing 1.1 per cent to $44.90, Fortescue Metals adding 1.9 per cent to $20.94 and Rio Tinto advancing 0.7 per cent to $115.23.

Liontown Resources was up another 1.8 per cent to $2.615, following Tuesday's 68.5 per cent gain on word the emerging lithium producer had rejected a $5 billion, $3-per-share offer from US lithium giant Albermarle.

Fellow lithium producer Pilbara was up 3.8 per cent and Allkem had advanced two per cent amid hopes for more M&A activity in the space.

All the big banks were lower, led by NAB which had fallen 2.1 per cent to $27.075, Westpac dropping 1.3 per cent to $21.245, ANZ retreating 0.6 per cent to $22.50 and CBA subtracting 0.9 per cent to $95.22.

The Australian dollar was buying 66.98 US cents, from 66.89 US cents at Tuesday's ASX close.