The Australian share market has fallen slightly after a volatile session on Wall Street, while surging food prices have caused British inflation to surge to its highest level in 40 years.
The ASX 200 index closed 0.2 per cent lower, at 7,113 points, after rising for the past three days.
Shares of Xero weighed on the tech sector, falling 7.1 per cent to $90.65.
Its chairman David Thodey told investors, at the cloud accounting company's annual general meeting, that that net subscriber growth in the United Kingdom had been "more subdued than we would like".
Transurban dropped 3.4 per cent to $14.16 after the toll road operator predicted a 2022/23 distribution to shareholders that was below consensus expectations.
By 4:20pm AEST, the Australian dollar had slipped to 69.2 US cents . That was after a 1.3 per cent drop overnight.
"Yesterday’s second-quarter wage price index provided another piece of evidence to show that there is not wage price spiral occurring in Australia," said Kristina Clifton, a senior economist at Commonwealth Bank.
She said there is now "a clear risk the RBA [Reserve Bank] does not hike the cash rate by 50bp [basis points] at the September Board meeting and instead increases the cash rate by 40bp or 25bp".
Meanwhile, the latest jobs data from the Bureau of Statistics had very little impact on the local currency.
The unemployment rate fell to 3.4 per cent in July, despite 41,000 workers losing their jobs.
This was largely due to the participation rate slipping to 66.3 per cent. It means fewer people were actively looking for work, so they were not officially counted as "unemployed".
Oil prices rebounded after hitting a six-month low overnight as markets weighed a steeper-than-expected drawdown in US crude inventories against rising output and exports from Russia.
Brent crude futures jumped 1.3 per cent to $US93.55 a barrel.
Spot gold dropped 0.7 per cent to $US1,762.45 an ounce.
Qantas' takeover bid scrutinised
The competition regulator has expressed its reservations about Qantas' plans to take over charter operator Alliance Aviation Services.
"We are concerned that this proposed acquisition is likely to substantially lessen competition for air transport services to and from regional and remote areas in Queensland and Western Australia for corporate customers," said Gina Cass-Gottlieb, chair of the Australian Competition and Consumer Commission (ACCC).
Qantas has owned 20 per cent of Alliance since 2019.
It has offered Alliance investors $4.75 a share for the rest of the company in an all-stock deal - meaning Qantas is willing to pay $610.8 million for the remaining 80 per cent of the company.
If the takeover were to be approved, it would give Qantas a dominant share of flying for resources industry customers, a market in which it competes against Virgin Australia and Cobham's National Jet Express, soon to be owned by Regional Express.
Many mining and oil and gas companies in Australia staff their operations using a fly-in/fly-out (FIFO) model rather than permanently basing their employees at remote sites, making the flying a lucrative business for airlines.
On Thursday, Qantas reaffirmed its view that the Alliance takeover would not lessen competition in the charter market.
Alliance represents only around 2 per cent of total aviation industry capacity, but it supplies around 30 per cent of charter services, followed by Qantas with 23 per cent and Virgin at 22 per cent, Qantas said in a statement.
Qantas' share price fell 1 per cent to $4.77, while stocks in Alliance sank 3.1 per cent to $3.44.
Penfolds winemaker offsets China tariffs
Treasury Wine Estates reported a 5.3 per cent rise in annual profit as strong growth in its US business and price increases more than offset a hit from hefty Chinese tariffs on Australian wine.
The winemaker has been re-directing supply of its prized Penfolds label wines to the United States, Europe and domestically since China imposed an anti-dumping duty on some Australian wines in late 2020.
Net sales revenue at its Americas unit grew 2.5 per cent for the year, benefiting from efforts to expand its presence in the market, including collaboration with rapper Snoop Dogg.
Still, overall sales revenue fell 3.6 per cent due to the China tariffs and as rising inflation prompted some consumers to cut back on spending.
The company reported a statutory full-year profit of $263.2 million for the year ended June 30.
Treasury said it would continue to increase prices this fiscal year, specifically on its premium wines, to cushion rising cost pressures.
The winemaker's share price initially fell after releasing its financial results. But it has since closed 4 per cent higher at $13.14.
Origin Energy's $1.4 billion loss
Origin Energy has posted a $1.4 billion loss in the year to June 30, weighed down by non-cash impairments, which outweighed its large profits from higher oil and gas prices.
Curtailed supply from Russia, following Western sanctions due to the country's invasion of Ukraine, amid strong demand for electricity generation have pushed LNG prices to record levels, earlier this year.
The company, which owns the ageing Eraring coal-fired power station in NSW, refused to give detailed guidance about the future due to "uncertainty around the range of potential earnings outcomes".
Nevertheless, it was an improvement over the previous year's result (a $2.3 billion statutory loss).
But according to Origin's preferred measure of earnings, its underlying result was a $407 million profit (up 30 per cent from last year).
Origin declared a final dividend of 16.5 cents per share (up from last year's payout of 7.5 cents).
Its share price fell 2.6 per cent to $5.91.
Wall Street anticipates lower rate hike
It was a volatile session on US markets overnight after the US Federal Reserve published its July meeting minutes, which suggested policymakers may be less aggressive than previously thought when they raise interest rates in September.
The S&P 500 lost 0.8 per cent to end at 4,274 points, while the Nasdaq Composite fell 1.3 per cent to 12,938.
The Dow Jones index dropped 0.5 per cent to 33,977.
According to the Fed minutes, its officials saw "little evidence" late last month that US inflation pressures were easing and that participants said it might take longer than anticipated for inflation to dissipate.
The Fed lifted its benchmark overnight interest rate by 2.25 percentage points this year to try to curb high inflation.
After the release of the minutes, traders of futures tied to the Fed's policy rate saw a 0.5-percentage-point rate hike as more likely in September.
"They stayed hawkish, but they also opened the door perhaps for a 0.5 percentage point hike in September as opposed to 0.75 [percentage points]," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
British inflation surges to 40-year high
European shares slid overnight after a sharp rise in UK inflation brought the spotlight back on the prospect of aggressive interest rate hikes ahead.
The pan-European STOXX 600 index shed 0.9 per cent, clocking its biggest one-day percentage fall in more than a month. The index also snapped a five-day winning streak.
Data showed British consumer price inflation rose to 10.1 per cent in July, its highest since February 1982.
This makes Britain the first major rich economy to see price growth hit double digits as surging food costs intensified a squeeze on household budgets.
The increase from June's annual rate of 9.4 per cent was above all economists' forecasts in a Reuters poll and fuelled bets by investors that the Bank of England will keep hiking interest rates quickly.
Despite warning this month that a recession was likely, the BoE raised its key rate by 0.5 percentage points (to 1.75 per cent), its first half-point rise since 1995.
The BoE expects inflation to peak at 13.3 per cent in October, when regulated household energy prices are next due to rise.
However, Citi economist Benjamin Nabarro said that, after the latest figures, he now expected inflation to hit an even higher peak — above 15 per cent early next year.
"With the Bank focused on signs of more persistent inflationary pressures, we think a hawkish reaction is now all but inevitable," he added.
Britain's FTSE 100 slipped 0.3 per cent, while Germany's DAX dropped 2 per cent.
"The market is seeing the UK experience as a harbinger of what is to come in the EU," said Stuart Cole, chief macro economist at Equiti Capital.
ABC/Reuters
