Oil Prices Stoke Inflation Worries, Australian Stocks Tumble

Australian stocks closed lower on Tuesday as concerns over inflation and interest rates weighed heavily on investor sentiment.

The S&P/ASX 200 index fell by 0.5% to 8,709.6, hurt by a decline in mining and gold stocks due to weak commodity prices.

Rising oil prices have revived inflation worries, with investors now pricing in a 90% chance of a 25 basis point interest rate hike at the US Federal Reserve's next meeting on Wednesday.

The Australian central bank is also expected to raise rates by 25 bps to 4.60% when it meets later this month.