Renewed strength in Australia’s beaten-up mining sector on Wednesday failed to overcome heavier losses in banking and energy stocks, which ultimately pulled the local sharemarket lower.

The S&P/ASX 200 closed 0.3 per cent, or 24 points, lower at 7982 points. Banks were the largest drag on the index. Commonwealth Bank fell 1.9 per cent to $141.05, ANZ 1.8 per cent to $30.84, National Australia Bank 1.5 per cent to 38.38 and Westpac 1.5 per cent to $31.84.

The fall took place before the release of the latest US consumer price index, set for Wednesday night (AEST) which is expected to detail the state of disinflation in the US. ANZ economist Brian Martin said the scale of the monthly CPI was expected to help dictate the size of the US Federal Reserve’s much anticipated first interest rate cut next week. Traders remain split on whether the Federal Reserve will deliver a 25 or 50 basis point cut.

“Data in line with estimates will indicate to the FOMC that inflation pressures have sustainably cooled, even as the last mile to 2 per cent may be several months away,” Martin said.

“Provided inflation progress continues broadly as expected, the state of the labour market is likely to shape market expectations for the pace and magnitude of rate cuts going forward,”

On the ASX, energy stocks also suffered, falling 1.4 per cent, after Brent crude slipped more than 3.5 per cent overnight on Tuesday falling below $US70 a barrel for the first time since November 2021. Santos shed 1 per cent at $6.85 and Woodside 2.2 per cent at $23.46.

Australian miners pushed higher, led by iron ore producers, which rode a 2.6 per cent bounce in the price to $US92.95. BHP gained 1.8 per cent at $39.34 and Fortescue 2.6 per cent at $16.30. The sector fell more than 5 per cent last week, its worst week so far this year.

Lithium stocks rallied: Pilbara Minerals rose 13.1 per cent to $2.67 and Liontown Resources 13.1 per cent to 69¢. The surge in lithium stocks came after reports that Chinese EV battery maker CATL had suspended operations at two lepidolite mines.

Shares in Mineral Resources jumped 16 per cent to $35.12 after Australia’s Foreign Investment Review Board approved the sale of a 49 per cent interest in the Onslow Iron haul road.

Data centre owner and operator NextDC slipped 5.6 per cent to 16.85 after completing a $550 million equity raising.

Property listings giant REA Group’s bid to acquire its UK counterpart Rightmove hit its first hurdle – the latter rejected its $11 billion cash and scrip offer. REA Group dipped 2.2 per cent lower to $197.99.

Energy and digital infrastructure investor Infratil is backing a plan to sell Manawa Energy to New Zealand’s Contact Energy in a deal valued at $1.7 billion. Infratil is a 51 per cent shareholder in Manawa. Infratil shares rose 1.6 per cent to $11.26.