Australian shares have ended the session flat after a volatile trade on Wednesday, with gains in financials outweighing losses in mining and energy stocks, while caution prevailed ahead of key US inflation data due later in the week.
The ASX 200 closed up 3 points, or 0.04 per cent, at 6,648.
By 4:15pm AEDT, the Australian dollar was down at 62.63 US cents.
Market participants across the world are looking forward to US inflation readings that are expected to show persistently strong price pressures and cement the Federal Reserve's hawkish rhetoric on monetary policy.
Coronado Global Resources was among the top gainers on the local benchmark index, rising 8 per cent after the coal miner confirmed that it was in talks with Peabody Energy Corp regarding a potential merger.
Mining stocks, however, fell 1 per cent after iron ore prices dropped on Tuesday amid tightening COVID-19 restrictions in China. Mining giants BHP and Rio Tinto dipped 0.2 per cent and 1.4 per cent, respectively.
Financials rose as much as 1.3 per cent, with the Commonwealth Bank, the country's biggest lender, gaining 1.5 per cent, while the remaining so-called "big four" banks climbed between 1 per cent and 1.9 per cent.
Bank of Queensland jumped 11.1 per cent as the lender reported a rise in profit and declared higher dividend.
Energy stocks slumped 1.5 per cent, extending losses to a third session to hit a one-week low, as oil prices fell following a flare-up in COVID-19 cases in China.
Woodside Energy and Santos were down 1.9 per cent and 2.5 per cent, respectively.
Healthcare and technology stocks were both down around 1 per cent, while real estate stocks added 0.9 per cent.
BHP loses High Court appeal
BHP has lost a High Court appeal related to an ongoing class action being brought by victims and shareholders over the Fundao Dam disaster in Brazil in 2015.
The claimants alleged they have suffered loss by reason of BHP's conduct in contravention of the continuous disclosure obligations.
They also alleged they have suffered loss as a result of BHP engaging in "misleading or deceptive conduct".
The attempt by BHP to block shareholders who are not Australian residents from participating in a class action against the company was unanimously rejected by the High Court.
In its ruling, the High Court said that Part IVA of the Federal Court of Australia Act 1976 "allows the inclusion of all persons as group members in a representative proceeding, irrespective of whether they are Australian residents".
That means the class action against BHP over the Brazilian dam collapse that killed 19 people can proceed.
Shares of BHP lost 1 per cent, to $39.54, at 4:23pm AEDT.
Wall Street mixed
Overnight, the S&P 500 and Nasdaq ended lower, with indications from the Bank of England (BoE) that it would support the country's bond market for just three more days, adding to market jitters.
BoE governor Andrew Bailey told pension fund managers to finish rebalancing their positions by Friday, when the British central bank was due to end its emergency support program for the country's bond market.
"What caused the latest downturn was an announcement the Bank of England was going to stop supporting the gilt (UK bonds) market in three days," said Randy Frederick, managing director, trading and derivatives at Charles Schwab in Austin.
Earlier on Tuesday, the Pensions and Lifetime Savings Association urged the BoE to extend the bond-buying program until October 31 "and possibly beyond".
Stocks were also volatile ahead of US inflation data and the start of third-quarter earnings later this week.
The Dow Jones Industrial Average rose 36.44 points, or 0.12 per cent, to 29,239.32, the S&P 500 lost 23.65 points, or 0.65 per cent, to 3,588.74 and the Nasdaq Composite dropped 115.91 points, or 1.1 per cent, to 10,426.19.
Amgen Inc shares jumped and gave the Dow its biggest boost, after a report that Morgan Stanley had upgraded the drug-maker's stock to "overweight" from "equal weight".
'The worst is yet to come', says IMF
On Tuesday, the International Monetary Fund said that colliding pressures from inflation, war-driven energy and food crises, and sharply higher interest rates were pushing the world to the brink of recession and threatening financial market stability.
It predicted a meagre 1.6 per cent growth in the US economy this year.
"The three largest economies, the United States, China and the euro area, will continue to stall," Pierre-Olivier Gourinchas, the IMF's chief economist, said in a statement.
"In short, the worst is yet to come and, for many people, 2023 will feel like a recession."
The pan-European STOXX 600 index lost 0.6 per cent and MSCI's gauge of stocks across the globe shed 1 per cent.
In commodities, oil prices extended Monday's decline as recession fears and the flare-up in COVID-19 cases in China raised concerns over global demand.
Brent crude was down, trading at $US93.83, by 4:25pm AEDT.
ABC/Reuters
