The Australian sharemarket is set for a subdued start on Thursday, with futures pointing to a 7-point, or 0.1%, decline as investors continue to weigh the prospect of another Reserve Bank of Australia (RBA) interest rate rise.
Attention will also turn to another busy day of corporate reporting, with Wesfarmers, Mineral Resources, Perpetual, Karoon Energy, Atlas Arteria, Qantas and Ramsay Health Care due to release results.
Household spending and private capital expenditure figures will also be released.
ASX retreats as inflation raises rate risks
The S&P/ASX 200 surrendered early gains on Wednesday to finish 36.8 points, or 0.4%, lower at 9,127.80 after hotter-than-expected inflation data revived expectations of another RBA rate increase.
The benchmark had been as much as 0.6% higher early in the session before turning lower.
Monthly headline inflation eased to 3.5% in July from 3.8% in June, but underlying inflation remained at 3.6% rather than moderating as expected, putting pressure on rate-sensitive sectors.
Financial stocks weakened, with Westpac down 0.6%, ANZ losing 0.2% and Commonwealth Bank falling 1%.
Technology was another major drag. WiseTech Global slumped 10.1% after reporting an 11% fall in full-year net profit, while Xero dropped 5.7% and TechnologyOne lost 2%.
Among the stronger performers, Lovisa surged 12.7% following a 10.7% increase in annual net profit, while Nine Entertainment climbed 7.2% and Woolworths gained 3.4%.
Energy stocks also came under pressure as oil prices eased, with Woodside falling 3.3% and Santos down 1.2%.
Wall Street subdued ahead of Nvidia results
US markets finished largely flat as an inflation reading came in line with expectations and investors remained cautious ahead of Nvidia's earnings.
The Dow Jones Industrial Average slipped 0.2%, the S&P 500 finished unchanged and the Nasdaq Composite eased 0.1%.
US annual inflation increased 3.7% in the 12 months through July, while separate figures showed the economy grew 1.5% in the second quarter, potentially giving the Federal Reserve room to keep interest rates steady in the near term.
Healthcare stocks were among the weakest performers, with the sector down around 1%. Moderna fell 6%, while Nvidia slipped 1.6% ahead of its results.
Meta Platforms gained 1.1%, while Intuit dropped 4% after forecasting annual revenue below Wall Street expectations.
US Treasury yields edged higher, with the 10-year yield rising to 4.65% and the 2-year yield climbing to 4.22%.
Investors are also looking ahead to the Jackson Hole symposium, where central bankers are gathering to discuss the outlook for monetary policy.
European markets edge lower
European markets also finished slightly weaker as investors assessed developments around Iran and Oman and the Strait of Hormuz.
Both the continent-wide FTSEurofirst 300 and the UK's FTSE 100 closed 0.1% lower.
Banks outperformed, rising around 1%, with Deutsche Bank gaining 4.3% to its highest level since July 2011 and Commerzbank adding 2.8%.
Technology shares fell 0.8% and healthcare stocks declined 1%.
Hochschild Mining gained 5.4% after higher gold prices boosted first-half revenue, while SAP dropped 2.9% following a disappointing outlook from US software group Intuit.
Australian dollar strengthens
Currency markets were mixed against the US dollar.
- The Australian dollar gained 0.1% to US71.71 cents, supported by expectations that persistent inflation could increase the likelihood of another RBA rate rise.
- The euro fell 0.2% to US$1.1652.
- The Japanese yen weakened 0.1% to ¥159.33 per US dollar.
Oil, metals and gold retreat
Oil prices fell as investors monitored Iran-Oman talks over the Strait of Hormuz and a smaller-than-expected increase in US crude inventories.
- Brent crude futures settled 0.8% lower at US$87.84 a barrel.
Base metals were also weaker as the US dollar strengthened.
- Copper futures fell 1.7% and aluminium fell 2.2%.
- Gold futures lost 0.9% to settle at US$4,653 an ounce following the US inflation reading.
- Iron ore moved in the opposite direction, rising 0.3% to US$95.58 a tonne as Typhoon Narra disrupted shipping routes in the South China Sea, constraining supply and lifting freight costs.