The Australian share market has fallen ahead of an expected interest rate rise by the Reserve Bank this afternoon to curb surging inflation, and Tesla founder Elon Musk has threatened to abandon his takeover bid for Twitter. 

The RBA is tipped to raise rates again by 0.25 per cent to 0.5 per cent, which would lift repayments on a $750,000 mortgage by $99 a month according to RateCity. 

ANZ predicted the central bank would increase borrowing costs by 0.4 per cent to 0.75 per cent today. 

Of the 35 economists surveyed by Reuters, 22 forecast a rise of one-quarter of a percentage point, 11 predicted a 40 basis point increase and, one expected a 50 basis point hike, and another said rates would stay on hold. 

Official interest rates could lift from the current 0.35 per cent to 1.75 per cent by year's end. 

At 12pm AEST, the All Ordinaries index was down 0.8 per cent to 7,373, while the ASX 200 had also lost 0.8 per cent to 7,149 with 10 out of the 11 industry sectors in the red. 

All the big banks were down, even though banks benefit from higher interest rates because it means higher revenue, with National Australia Bank (-1.6pc) doing the worst. 

Gold miners also dropped after a fall in the price of the precious metal overnight, as did oil and gas producers.

Newcrest Mining lost 1 per cent to $24.13, while BHP rose 0.1 per cent to $46.41.

The best performers on the ASX 200 at midday were copper miner Sandfire Resources (+3.7pc), investment firm Magellan Financial (+3.1pc), and rival investments firm Janus Henderson (+2.6pc).

Leading the losses were buy now, pay later firm Zip (+10,5pc), pharmaceutical company, Clinuvel Pharmaceuticals (-3.6pc), and investment company Pinnacle Investment Management (-4.5pc).

At 12:25pm AEST, the Australian dollar was down 0.3 per cent to around 71.68 US cents. 

It fell overnight on rising US bond yields, with US investors expecting more US interest rate increases this year. 

Yancoal rebuffs Chinese takeover bid 

China's Yankuang Energy said it was open to further negotiations with Yancoal Australia, after the Chinese backed Australian coal miner said it will oppose a $2.5  billion deal for Yankuang to buy the remaining shares in Yancoal that it does not own. 

Yancoal said an independent board set up to assess the potential takeover had unanimously found that the deal was not in the best interests of minority shareholders because it undervalued the stock. 

Reuters previously reported that the deal was unacceptable to global miner Glencore, which holds a 6.4 per cent stake in Yancoal. 

Yancoal shares were up 2 per cent to $5.54 at midday.

Twitter takeover

Electric car billionaire Elon Musk has threatened to walk away from his $US44 billion ($61 billion) takeover bid for Twitter after accusing the social media giant of refusing to give him information about fake accounts and spam. 

Mr Musk's lawyers sent a letter to Twitter's chief legal officer, Vijaya Gadde, which accused the company of "resisting and thwarting" giving the billionaire information about "spam bot" accounts. 

In the letter,  a lawyer for Mr Musk called it a "clear material breach" of the terms of their merger agreement, and said he reserved all rights to terminate his takeover bid. 

"Twitter's latest offer to simply provide additional details regarding the company's own testing methodologies, whether through written materials or verbal explanations, is tantamount to refusing Mr Musk's data requests," the letter said. 

Mr Musk said he needs the data to conduct his own analysis of Twitter users because he did not believe the company's "lax testing methodologies." 

Twitter said that it planned to enforce the completion of the deal on agreed terms. 

"Twitter has and will continue to cooperatively share information with (Mr) Musk to consummate the transaction in accordance with the terms of the major agreement," the company said in a statement. 

'Buyer's remorse'

The salvo has prompted speculation that Mr Musk's deal to buy Twitter is falling apart as it is not the first time that the eccentric billionaire has publicly suggested his purchase of Twitter may not happen. 

Dennis Dick from Bright Trading said it was "fairly obvious that Musk has buyer's remorse and he is trying whatever to get a reduction in price, and I think he may succeed," he told Reuters. 

Last month, Mr Musk tweeted that the deal was "temporarily on hold" and said he would not move forward with the offer until the company showed proof that spam bots account for fewer than 5 per cent of its users. 

He has said he believes spam bots constitute at least one-fifth of the user base. 

The billionaire waived due diligence when he agreed to buy Twitter at $US54.20 a share in April.

Twitter shares fell 1.5 per cent on the news to $US39.56.

Wall Street rises 

US stocks ended a volatile session higher, but lingering worries about rising inflation continued. 

The Dow Jones index rose 16 points or 0.05 per cent to 32,916, the S&P 500 rose 0.3 per cent to 4,121, and the Nasdaq Composite added 0.4 per cent to 12,061. 

Amazon shares increased 2 per cent and were the biggest driver on the S&P 500. 

Apple shares rose 0.5 per cent as it made major announcements at its annual software developer conference. 

In London, the FTSE 100 index rose 1 per cent to 7,608, the CAC 40 in Paris also added 1 per cent to 4,988, and the DAX in Germany gained 1.3 per cent to 14,654.

Spot gold fell to $US1842.13 an ounce overnight, while Brent crude oil fell below $US120 a barrel.

ABC/Reuters