Australian shares have risen after two straight sessions of falls, with energy and mining stocks leading the recovery on firm commodity prices, while concerns over aggressive rate hikes and slowing growth across the globe checked risk appetite.
Market participants are waiting for a US Federal Reserve gathering later this week in Jackson Hole, Wyoming, where Chair Jerome Powell is expected to reinforce a strong commitment to stamp out inflation running at a four-decade high.
The ASX 200 closed up 36 points or 0.5 per cent to 6,998, after shedding 2.2 per cent in the previous two sessions.
By 4:45pm AEST, the Australian dollar was down at 69 US cents.
Leading the gains, energy stocks rose 2.8 per cent after oil prices jumped nearly 4 per cent overnight on possible OPEC+ output cuts.
Sector majors Santos and Woodside Energy rose 2.1 per cent and 3.4 per cent, respectively.
Miners advanced 1.3 per cent to their highest since mid-June, with BHP and Fortescue adding 1.1 per cent and 0.4 per cent, respectively.
Gold miners slipped 0.5 per cent, with Newcrest, the country's largest gold miner, shedding as much as 1.5 per cent.
Among individual stocks, AUB Group gained 5.5 per cent, after the insurance firm posted a 14.5 per cent rise in full-year profit.
Software solutions provider WiseTech rose 12.8 per cent after the company raised its dividend and reported a jump in annual profit.
WiseTech reported an 80 per cent profit increase to $194.6 million in the 2022 financial year and the company's revenue was also up, by 25 per cent.
Domino's Pizza rose 7.6 per cent after announcing expansion in Asia.
On the other hand, Coles tumbled 4.6 per cent after the Melbourne-based retailer flagged higher costs for the 2023 fiscal year.
Coles skids
Coles posted a 4.3 per cent rise in annual profit on Wednesday, boosted by online sales as people stocked up on essential items during extended lockdowns in the first half of the year.
The country's second biggest grocer said sales at supermarkets, its main unit, came in at $34.62 billion even as it faced store closures, supply problems due to floods, and widespread staff absenteeism due to the Omicron COVID-19 outbreak.
The unit had reported sales of $33.87 billion a year earlier.
The more-than-100-year-old, Melbourne-based retailer incurred $240 million in COVID-related costs, compared to about $130 million last year.
Coles reported a net profit after tax of $1.05 billion for the year ended June 30, compared with $1.01 billion a year earlier, and a dividend of 63 cents per share.
However, the company forecast higher costs for fiscal 2023, as inflationary pressures continue to impact operations, and added that the COVID-19 pandemic and flu season had contributed to increased team member absenteeism costs.
It said capital expenditure was expected to be between $1.2 billion and $1.4 billion in fiscal 2023, compared with a net capex of $1.14 billion this year.
The cost of doing business as a percentage of sales increased by 50 basis points to 21.4 per cent in 2022 due to higher fuel costs and underlying cost inflation, Coles said.
"Consistent with our suppliers and customers, we are also seeing inflationary pressures impacting our own cost base with increasing wages, rent, fuel, supply chain and capital costs," the company said in a statement.
Retailers globally have warned that rising energy, fuel and ingredient costs will continue to reflect in higher price tags as they strive to protect their margins, even as shoppers switch to lower-priced goods amid a cost-of-living squeeze.
World equities decline
Wall Street ended down on Tuesday as investors focused on data showing a slowing economy ahead of a US Federal Reserve gathering this week in Jackson Hole, Wyoming.
The S&P 500 dipped after data showed private-sector business activity in the United States contracted for a second straight month in August, with particular softness in the services sector as demand weakened in the face of inflation and tighter financial conditions.
The S&P Global flash composite purchasing managers index, or PMI, for August dropped to 45, the lowest since February 2021, from 47.7 in July. A reading below 50 indicates a contraction in activity.
Stocks have declined in recent sessions ahead of this week's central bank gathering in Jackson Hole, where Fed Chair Jerome Powell is expected on Friday to reinforce a strong commitment to stamp out inflation running at a four-decade high.
Traders are split between expecting a hike of between 50 and 75 basis points by the central bank after several policymakers recently pushed back against expectations of a dovish pivot and emphasised the Fed's commitment to fight inflation.
"What we have seen in the past week is the realisation that the Fed could still raise interest rates by 75 basis points in September," said Jake Dollarhide, chief executive of Longbow Asset Management in Tulsa, Oklahoma.
"The market fears that Powell's going to go back into a hawkish stance."
The benchmark 10-year yield rose to its highest level since late July.
Zoom Video Communications tumbled almost 17 per cent after the former "stay-at-home" stock darling cut its annual profit and revenue forecasts.
Of the 11 S&P 500 sector indexes, seven declined, led lower by real estate, down 1.5 per cent, followed by a 1.4 per cent loss in health care.
The S&P 500 declined 0.2 per cent to end the session at 4,129 points.
The Nasdaq was unchanged at 12,381 points, while the Dow Jones Industrial Average declined 0.5 to 32,910 points.
Gold snapped a six-session losing streak as the dollar weakened while oil rose almost 4 per cent after Saudi Arabia floated the idea of output cuts from the Organisation of the Petroleum Exporting Countries and its allies.
By 4:53am AEST, Brent crude oil was flat, trading at $US100.28 a barrel.
MSCI's global stock index slid 0.3 per cent, while the STOXX index of European company shares closed down 0.4 per cent, having fallen for nearly a week.
ABC/Reuters
