Oct 11 (Reuters) - Australian shares gave up early gains to end lower on Tuesday, pressured by financials and commodity stocks, with investors exercising caution ahead of a key U.S. data to get clues around the Federal Reserve's rate hike trajectory.
The S&P/ASX 200 index closed 0.3% lower at 6,645 points.
"For the week ahead, (there's) a reality check with the impending U.S. CPI and PPI report; if the print stays as solid as expected, (it) will cement the view for another 75 bps (basis points) hike by Fed in two weeks," Hebe Chen, a market analyst with IG Markets said.
Investors' focus on inflation data follows a stronger-than-expected U.S. jobs report last week, with this week's data likely to show stubbornly high readings which could push the Fed to pursue its hawkish rhetoric.
Domestic financial stocks dropped 0.3%, with Commonwealth Bank of Australia and National Australia Bank losing 1% and 0.5%, respectively.
Energy stocks shed 1.6% as concerns of slowing demand due to rising COVID-19 cases in China kept oil prices in check.
Sector heavyweights Woodside Energy and Santos fell 2.1% and 0.9%, respectively.
Miners followed suit to give up 0.3%. BHP Group , Rio Tinto and Fortescue Metals slid between 0.3% and 2.3%.
Ahead of the government's first budget in two weeks, Australia's Treasurer Jim Chalmers said its economy will likely avoid a recession despite the world economy being in "a dangerous place right now."
IG Markets' Chen, though, said it would be "too optimistic" to expect Australia to escape a recession when two of its biggest trading partners — the U.S. and China — were suffering strong economic headwinds.
Gold stocks slumped 0.8%, with Newcrest Mining and Northern Star Resources falling 0.2% and 0.6%.
In New Zealand, the benchmark S&P/NZX 50 rose 0.4% to 10,956.71, snapping from a three-day losing streak. (Reporting by Roushni Nair in Bengaluru; editing by Uttaresh.V)
