Staff writers
Updated ,first published
The Australian sharemarket opened higher on Wednesday amid another flurry of corporate results after a solid session on Wall Street, where falling oil prices eased inflation worries, pushed bond yields lower and supported stock prices.
The S&P/ASX 200 was up 34 points, or 0.4 per cent, at 9198.60 as of 10.55am AEST, extending its gains from the past two sessions. Woolworths, Nine Entertainment and Flight Centre were among the companies reporting their latest results, while the latest inflation figures will be released at 11.30am AEST. The Australian dollar was trading at US71.65¢.
Woolworths jumped 4.5 per cent, leading consumer staples higher after saying its winter sales have been boosted by its wildly popular Ooshies collectables campaign. In the first eight weeks of the new financial year, food sales at its Australian supermarkets jumped 7.6 per cent, with the Disney plastic figurines expected to have generated up to 2 percentage points of that growth. Food sales rose 4.6 per cent in the year to June 30, helping the nation’s biggest grocer grow its net profit by 18.1 per cent to $1.14 billion and raise its final payout to shareholders to 52¢ a year, up from 45¢ a year ago. Coles, which on Tuesday said its sales had taken a hit from its rival’s Ooshies campaign, added 1.4 per cent.
The mining heavyweights also bolstered the ASX in early trade, with BHP – the nation’s biggest stock – up 1.3 per and its iron ore and copper rival Rio rising 1.4 per cent. Gold producers also advanced, with Evolution Mining up 1.7 per cent and Newmont up 2.4 per cent as gold held a five-day gain, with inflation concerns eased by a drop in US Treasury yields and lower oil prices as Iran and Oman discussed ways to reopen the Strait of Hormuz. Bullion traded around $US4660 an ounce, close to a three-month high struck in the previous session.
Nine Entertainment, the publisher of this masthead, jumped 5.6 per cent after the media company saw its full-year net profit from its continuing businesses rise 7 per cent to $142.4 million and revenue lift 3 per cent to $2.19 billion despite a tough advertising market. In a major step for the company, Nine has shifted its focus away from traditional broadcasting, emphasising positive results for its subscription streaming and publishing businesses and growth at QMS.
However, energy stocks limited market gains, with Woodside down 4 per cent and Santos down 2.4 per cent after Brent crude fell 2.2 per cent to $US86.60 a barrel this morning. The drop came even though tensions between the US and Iran seemed to ratchet higher after the Trump administration announced new sanctions to further hurt Iran’s economy. Brent’s price zigzagged between $US72 and $US102 last month as hopes rose and fell that the two nations could reach a deal that would allow oil tankers to freely exit the Persian Gulf again.
Travel agent Flight Centre slumped 5.8 per cent after revealing the conflict in the Middle East knocked $60 million out of its leisure profits in the fourth quarter. A spate of cancellations and a disruption of travel as the US-Israel war with Iran kicked on, “offset corporate’s full-year profit uplift”, the company said. Underlying profit before tax fell to $278 million for the year to June, down 4 per cent from the $289 million the year before, it said.
WiseTech Global sent the tech sector down in early trade, plunging 7.9 per cent after saying its full-year net profit fell 11 per cent to $US178.7 million ($250 million), even as its revenues jumped 79 per cent to hit a record $US1.3 billion, as forecast by the company. Software maker Xero, the second-biggest tech stock, dropped 4.3 per cent.
On Wall Street overnight, The S&P 500 rose 0.3 per cent and edged closer to its all-time high set earlier this month. The Dow Jones Industrial Average added 0.3 per cent and the Nasdaq composite climbed 0.7 per cent.
The retreat in oil prices offered some relief after persistent inflation and elevated yields weighed on risk appetite. Three key events may shape trading this week — Nvidia’s results on Wednesday for clues on whether the AI rally can regain momentum, the release of the US PCE gauge and Federal Reserve Chair Kevin Warsh’s Jackson Hole speech on Friday for signals on the path of interest rates.
“Although the mountain of event risk is casting a slight shadow over the markets, the easing of geopolitical risks and subsequently lower oil price has been enough to offset the trepidation,” wrote Kyle Rodda, a senior analyst at Capital.com.
Brent crude fell 3.9 per cent to $US87.05 and was heading for a second decline following 13 gains in 14 days. The drop came even though tensions between the United States and Iran seemed to ratchet higher after the Trump administration announced new sanctions to further hurt Iran’s economy.
Brent’s price zigzagged between $US72 and $US102 last month as hopes rose and fell that the United States and Iran could reach a deal that would allow oil tankers to freely exit the Persian Gulf again.
A delegation from Pakistan left Iran after talks with Iran’s president and other senior officials on reopening the Strait of Hormuz and reviving negotiations to end the Iran-US conflict, the Pakistani military said. Pakistan Interior Minister Mohsin Naqvi said a meeting with Iranian President Masoud Pezeshkian had been “very positive and productive.”
Tuesday’s drop in oil prices tempered the worries about high inflation that helped drive Treasury yields in the bond market higher through the summer. Yields had gotten so high that the US Treasury Department announced a surprise move last week to increase its repurchases of longer-term Treasury notes and bonds.
High yields make borrowing more expensive for everyone and can slow the economy’s growth while undercutting prices for stocks, cryptocurrencies and other investments.
The yield on the 10-year Treasury fell to 4.64 per cent from 4.70 per cent late Monday and from 4.74 per cent at the end of last week. That’s a significant move for the bond market, though the 10-year yield remains firmly above its 3.97 per cent level from before the war with Iran sent oil prices and worries about inflation much higher.
Canada announced it is targeting more than 700 US-made products as the trade war with America escalates. The list extends well beyond industrial goods, hitting everyday purchases such as seafood, cheese, clothing, cosmetics and toilet paper, with some facing duties as high as 50 per cent.
The tariffs on American steel, dairy products, appliances, farm equipment, pulp and paper and electronics take effect September 8 at rates of 15 per cent, 25 per cent and 50 per cent, with Canada matching the corresponding US tariff rate on each product. Canadian officials said the goal is not to raise revenue but to protect Canadian companies and reduce US imports.
On Wall Street, Nvidia and other winners of the boom in artificial-intelligence technology helped lead the way. Nvidia rose 2.2 per cent, a day after its drop of 2.9 per cent was the heaviest weight on the S&P 500.
AI stocks have veered up and down through the summer on worries that their prices shot too high and that the AI boom may not be sustainable if it doesn’t produce enough profits for companies. Nvidia will report its latest quarterly results on Wednesday, which could help steer the next move for AI-related stocks.
The gains for chip stocks helped offset a 30.7 per cent drop for Dick’s Sporting Goods, which reported weaker results for the latest quarter than analysts expected. Executive chairman Ed Stack said the retailer cut prices on some of its footwear and apparel to remain competitive, while launches for some footwear during the quarter ended up being weaker than it expected.
The company cut its forecast for an underlying measure of profit in 2026 for both its Dick’s and Foot Locker businesses. The company spent $US2.4 billion last year to acquire the struggling Foot Locker chain as inventory in footwear began to pile up for most retailers. Dick’s stock is potentially heading toward its worst day in history.
Worries have been rising about how strong spending can remain generally for US households, which is the main engine of the economy. They’re facing higher prices on everything from food to clothes and a job market that suddenly looks iffier after employers cut more jobs last month than they added.
A report from the Conference Board on Tuesday said that confidence among US consumers weakened by more than economists expected.
In stock markets around the world, many indexes drifted modestly higher. South Korea’s Kospi, which is dominated by two AI winners, added 0.7 per cent for one of the world’s biggest moves. It’s been steadying since plunging 22.2 per cent in July.
