Stocks were pressured after underlying inflation rose 0.9% in the June quarter, raising the possibility of a rate hike by the year end.
Financials drove the session’s losses, with three of the big four banks shedding over 1% amid global debt concerns.
Currency exposed miners punished after the Aussie dollar soared to a fresh record; Bluescope slumped 6.9% and OneSteel dropped 3.4%.
The big miners were also weaker; BHP fell 1.2% and Rio Tinto declined 0.5%.
The ASX 200 gave up 36 points (-0.8%), settling at 4537.