The local share market has finished slightly lower as investor sentiment remains muted ahead of the release of United States inflation data.

The benchmark S&P/ASX200 index closed Wednesday down 8.4 points, or 0.12 per cent, to 7,255.

The broader All Ordinaries was basically flat, down 4.4 points or 0.06 per cent, to 7,452.

Investors are optimistic there will be no further Federal Reserve rate hikes as more signs emerge of a global economic slowdown but market analyst Evan Lucas says it's a dangerous time to predict rates.

The Consumer Price Index data, released Wednesday night Australian time, could pare back rate cut bets and support the US dollar.

"Realistically, it's all about what goes on in the US and how much higher US interest rates are going to go," Mr Lucas told AAP.

"If tonight the CPI is a blowout and if the next CPI in three months' time shows no sign of abating, then there is every chance that by December this year, the Federal Funds Rate could rise.

"It's a dangerous time to be forecasting when rates go up because the RBA caught most people off guard at the start of this month."

Analysts said the Federal Budget had little impact on shares, which Mr Lucas said was a good thing.

"You don't actually want the market to react to the budget because it would suggest the budget has done something to fundamentally move the dial in a way that it shouldn't have, whether that's positively or negatively," he said.

"It is a good thing to see the market not reacting to the budget.

"The budget at the moment needs to be 'fairly bland' because we've got an issue around inflation."

Health and cost-of-living relief were at the centre of the federal budget, with health spending making up about a sixth of government expenses in 2023/24 at $106.5 billion.

Companies such as Woolworths and Coles and health care companies would to some extent benefit from the announcement, Mr Lucas said.

The health care sector closed 1.0 per cent higher.

Rhythm Biosciences was up 5.9 per cent to $36, Monash IVF 2.2 per cent to $1.17 and Integral Diagnostics 3.1 per cent to $3.35.

Telix Pharmaceutical rose 3.3 per cent to $10.95 and CSL 1.2 per cent to $303.20.

The market was weighed down the most by the financials sector, which dropped 0.5 per cent.

Australia's major banks were mixed, with CBA and ANZ clawing back losses while Westpac and NAB remained lower.

CBA rose by 0.5 per cent to $97.85 and ANZ by 0.5 per cent to $24.11.

Westpac fell by 0.3 per cent to $21.70 and NAB recorded the biggest loss, down 4.02 per cent to $26.26.

Betashares economist David Bassanese said the "surprise budget surplus" added risk to the RBA potentially raising interest rates at least once in the coming months.

"The disappointment is not that the government has attempted to support some of the less well-off in the community but rather that greater effort was not made at a still relatively early stage in the electoral cycle to introduce tougher measures elsewhere in the economy," he said in a note.

Real estate and information technology were higher with the other ASX sectors down or basically flat.

Appen experienced one of the biggest losses, dropping 28.21 per cent to $2.29 after warning it expected revenue to decline in FY23.

The artificial intelligence dataset company on Wednesday announced a 21.4 fall in revenue compared to April last year, with a gross profit loss of 24.7 per cent.

The Australian dollar was buying 67.66 cents, from 67.72 US cents at Tuesday's ASX close.

ON THE ASX:

* The benchmark S&P/ASX200 index closed Wednesday down 8.4 points, or 0.12 per cent, to 7,255.

* The broader All Ordinaries was basically flat, 4.4 points lower or 0.06 per cent, to 7,452.

CURRENCY SNAPSHOT:

One Australian dollar buys:

* 67.66 US cents, from 67.72 US cents at Tuesday's ASX close

* 91.59 Japanese yen, from 91.27 Japanese yen

* 61.68 Euro cents, from 61.58 Euro cents

* 53.60 British pence, from 53.66 British pence

* 106.65 NZ cents, from 106.88 NZ cents