Australian consumer sentiment bounces in March, but war looms

SYDNEY, March 10 (Reuters) - Australia's ‌consumer sentiment ​bounced ​modestly in early March after three months of retreat, a survey showed on Tuesday, though the mood ‌was steadily darkening as conflict in the Middle East ⁠broadened.

A Westpac-Melbourne Institute survey showed its main index of consumer sentiment ‌rose 1.2% to 91.6 in ‌March. The reading below 100 means pessimists still considerably outnumber optimists.

The survey was taken from March 2 to March ​6 and responses got gloomier as the week and the U.S.-Israeli war on Iran rolled on.

"Responses from those surveyed ⁠in the last three days were consistent with an index read of just 84," ​said Westpac's head of Australian macro-forecasting, Matthew Hassan.

A separate survey of consumers from ANZ out on ​Tuesday showed a sharp drop in ‌confidence last week as the conflict in the Middle East pushed petrol prices higher.

Inflation expectations saw ⁠the largest weekly rise since the series started in 2010, jumping 0.8 percentage points to 6.1%.

Stubborn inflation had already led the Reserve ⁠Bank of Australia to raise its main cash rate a quarter point ​to 3.85% in February, and warn of further tightening if needed.

The Westpac survey's measure of family finances compared to a year ago bounced ‌1.8%, after a steep drop the previous month, while the longer-term outlook eased 0.1%.

Surprisingly, a measure ‌of whether it was a good time to buy a ⁠major household item jumped ‌4.9%, to recover much ​of the fall suffered in February after the RBA's rate hike.

(Reporting by Wayne Cole; Editing by Jamie ‌Freed)

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