The benchmark S&P/ASX200 index finished Wednesday 68.8 points, or 0.83 per cent, lower, at 8,180.4, while the broader All Ordinaries fell 66.4 points, or 0.78 per cent, to 8,439.5.
Annual headline inflation for the September quarter fell to 2.8 per cent, according to the Australian Bureau of Statistics, within the RBA's target range.
But underlying inflation was still at an elevated 3.5 per cent, leading money markets to slash the likelihood of a pre-Christmas rate cut and Commonwealth Bank to push back its rate cut prediction from December to February.
"The September quarter 2024 consumer price index indicated that the disinflation process has continued. But not quite at the pace we anticipated on an underlying basis," CBA economists Gareth Aird and Stephen Wu wrote in an investor note.
"The upshot is that we no longer expect the RBA to cut the cash rate in December 2024. Â Instead we pencil in February 2025 for a 25bp rate decrease."
The fall in inflation was roughly in line with analyst expectations.
Energy rebates and lower petrol prices weighed on the headline figure but price pressures remained in recreation, food and insurance.
Overnight, shares rose on Wall Street led by Google parent Alphabet, which climbed higher after beating earnings estimates for the September quarter.
Every ASX sector finished in the red except for property trusts, which lifted 0.5 per cent.
Consumer staples fell 3.6 per cent in a bad session for the major supermarkets.
Coles was down down 2.1 per cent and Woolworths slumped 6.1 per cent after the latter warned its profit for the financial year was likely to be slimmer than previously expected.
Australia's largest miner, BHP, gained 0.2 per cent.
The company had moved on from its pursuit of London-listed miner Anglo-American after its takeover bid earlier in 2024 was rebuffed, chair Ken McKenzie told shareholders at its AGM in Brisbane.
Fellow iron ore miner Rio Tinto fell 0.7 per cent while Fortescue slipped 1.4 per cent.
The big four banks were all lower, with NAB down 1.2 per cent, ANZ 1.1 per cent, CBA 0.9 per cent and Westpac 0.7 per cent.
Troubled casino operator Star Entertainment fell 3.7 per cent after revenue slipped 10 per cent in the last financial year.
"The Star's 2024 financial year performance was impacted by challenging trading conditions, cost of living pressures, casino operating reforms and loss of market share," CEO Steve McCann said.
Star was fined $15 million earlier in October and had its Sydney licence suspension extended after a probe by the NSW Independent Casino Commission revealed further significant failings in its operations.
Online fashion retailer Cettire plummeted 17.5 per cent to $1.46 after RBC Capital Markets downgraded the stock following a negative trading update.
"Cettire's first quarter results reveal continued challenges for the luxury platform," analyst Wei-Weng Chen said.
"Ultimately based on Cettire's current second quarter run rate and margins, we view today's update as a negative five per cent downgrade to 1H25 revenue and negative 48 per cent downgrade to 1H25 earnings before interest, taxes, depreciation and amortisation."
The Australian dollar was buying 65.40 US cents, down from 65.56 US cents at Tuesday's ASX close.
ON THE ASX:
* The benchmark S&P/ASX200 index finished Wednesday down 68.8 points, or 0.83 per cent at 8,180.4.
* The All Ordinaries fell 66.4 points, or 0.78 per cent, to 8,439.5.
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 65.40 US cents, from 65.56 US cents at Friday's ASX close
* 100.26 Japanese yen, from 100.39 yen
* 60.47 euro cents, from 60.75 euro cents
* 50.32 British pence, from 50.65 pence
* 110.26 NZ cents, from 109.93 NZ cents.
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