Housing, healthcare, and education costs increases were the largest contributors to the inflation index in the last twelve months. In the last quarter food, services, and housing added to the inflation pressures.

The Australian dollar broke through the $0.9000 mark following the release of stronger-than-expected inflation numbers, which boost the chances of a rise in interest rates.

The Australian dollar fetched U.S.$0.9027/29, up from yesterday''s close of U.S.$0.8912/15.

Of the ASX 200 index shares, Paladin Resource led the gainers with a rise of 4.2% followed by increases in Sonic Health Care by 3.4%, in Jubilee Mines NL by 3.2%, in Transfield Services by 3.1%, and in Straits Res Limited by 2.9%.

Of the ASX 200 index stocks, Perilya led the decliners with a fall of 3.9% followed by losses in AWB Limited of 4.4%, Bluescope Steel of 4.5%, Ones Steel Limited on 7.9% and AED Oil Ltd of 9.5%.

In general marker trading banks declined led by a fall of 2.3% in Macquarie Bank Ltd on the New York Times report that Merrill Lynch & Co. will probably add about $2.5 billion more in write-downs to the previous estimate of $5 billion losses. After the close, in regular trading Merrill Lynch fell 7% after reporting a subprime loan trading loss of $8.5 billion.

The Commonwealth Bank of Australia was 0.6% lower after the worries that higher inflation may lead higher rates.

The National Australia Bank Ltd was down 0.2% and the Australia & New Zealand Banking Group Ltd was 0.3% lower.

Woodside Petroleum climbed 0.6%, Santos added 1.1% and Oil Search advanced 1.8%.

Virgin Blue, which today announced a positive outlook for the current financial year, added 4.1%. In other aviation stocks, Qantas Airways lifted 1.4% while Macquarie Airports fell 2.2% on speculation that the company may purchase international assets.