ASX 200 falls for seventh session as CPI hits 4.6%; RBA risk keeps 8,600 in focus

Australia’s share market extended its losing streak to seven sessions on Monday, the longest run of declines since mid-2022, as a jump in headline inflation overshadowed a softer core reading and kept traders fixated on the 8,600 level ahead of the Reserve Bank’s next policy call.

Headline CPI rose to 4.6%, up from 3.7%, with fuel and energy costs still feeding through from the Iran-war shock. The trimmed-mean measure came in softer than feared, and market pricing reportedly eased to roughly 71%–72% for a May rate hike from the mid-80s earlier.

It was a relief trade, not a bullish reversal. The index closed lower again, with flows still pointing to distribution rather than renewed risk appetite. Sector moves underscored the split tape. Energy climbed as oil-linked names benefited from the same inflation impulse denting broader sentiment, with Woodside advancing after reporting stronger first-quarter revenue.

Financials slipped, as rate-sensitive banks remained exposed to the possibility the RBA stays hawkish into the second half. Healthcare lagged, pressured by weakness in CSL. Codan was the notable outlier, surging after a guidance upgrade—strong stock-specific gains, but not enough to repair a fragile index.

Technically, the 15-brick Renko view shows price hovering near 8,640, still below the 500-day SMA around 8,690 and a bearish Supertrend near 8,715. A sequence of lower highs around 9,053, 8,993, 8,847 and 8,828 points to sellers getting more aggressive on each bounce.

Momentum remains soft: the RSI near 36 signals weak participation, while a Z-Score SMA around -1.5 indicates extended downside pressure consistent with the trend. Key support sits near 8,255, with resistance around 8,755 and 9,230. A short-covering bounce would not be surprising after seven straight declines, but unless buyers reclaim 8,690–8,715 with conviction, any rebound looks temporary rather than trend-changing.

A break below 8,600 would open the door toward 8,567, then 8,500. The next major catalyst is the RBA’s May 5 policy decision. Traders trimmed hike expectations after the core inflation miss, but the central bank still confronts a difficult mix of high headline inflation, oil-driven cost pressure, sticky services risks and a stretched equity market with limited valuation cushion.

A hawkish tone could turn any near-term rebound into another selling opportunity.