Australian shares have ended Tuesday's session marginally higher after sharp losses in the previous session, powered by gains in financials and energy stocks, though weakness in underlying prices over renewed COVID-19 curbs in China dented local miners.
The ASX 200 closed up four points, or 0.1 per cent, to 6,606.
By 4:24pm AEST, the Australian dollar was down, at 67.27 US cents.
Leading gains among sectors, utilities gained 1.3 per cent, consumer and healthcare rose 1.2 per cent each.
Energy stocks climbed 0.2 per cent, even as oil prices fell.
Index majors Woodside Energy strengthened 0.5 per cent while Santos lost 0.9 per cent.
Technology sub-index, however, was a dull spot sliding as much as 0.6 per cent.
Growth stocks tracked overnight Wall Street weakness, as investors remained cautious over crucial inflation data that could set the tone for US Federal Reserve's monetary policy tightening.
Sector leaders Life360 and Block dropped 12.2 per cent and 3.2 per cent, respectively.
US-based buy-now-pay-later (BNPL) firm Sezzle plunges as much as 39 per cent to $0.26 after Zip buyout deal falls through, marking its biggest intraday percentage drop since March 23, 2020.
Shares of Zip firmed 6 per cent to $0.53 on the news.
"The termination of the proposed merger has the potential to slow Zip's near-term cash burn given Sezzle is loss-making, but it also slows the scaling of Zip's US business, where we continue to have concerns around transaction frequency," a UBS analysis noted.
Miners followed suit, tumbling 1.4 per cent, after iron ore prices took a hit on fresh coronavirus restrictions in the world's top steel producer China.
Parenti Global, Sayona Mining and 29 Metals were the top laggards on the sub-index, losing between 6.9 per cent and 8 per cent.
Viva Energy firmed 2.6 per cent, New Hope Corporation gained 3.5 per cent and Whitehaven Coal advanced 1.8 per cent.
Among the worst performers were Novonix (-6 per cent) and Imugene (-4.3 per cent).
Global shares decline
World equities and US bond yields fell on Monday as investors prepared for fresh inflation data and corporate earnings that may be seen as potentially influencing the Federal Reserve’s path ahead for interest-rate increases.
The pan-European STOXX 600 index lost 0.5 per cent and MSCI's gauge of stocks across the globe shed 1.2 per cent.
Underlining the global nature of the inflation challenge, central banks in Canada and New Zealand are expected to tighten policy further this week.
Wall Street — which was off to a strong start in July after a brutal first half of the year — further declined as traders fear another round of heavy sell-off if company results fail to meet expectations this month.
The market mood will be tested by earnings from JPMorgan and Morgan Stanley on Thursday, with Citigroup and Wells Fargo the day after.
"Not only are people worried that earnings are going to come in weak because of an economic slowdown, but also because of the rise of the US dollar, which creates a headwind for earnings for multinationals," Dakota Wealth Management's senior portfolio manager, Robert Pavlik, said.
The Dow Jones Industrial Average fell 164 points, or 0.5 per cent, to 31,174, the S&P 500 lost 45 points, or 1.2 per cent, to 3,854 and the Nasdaq Composite dropped 263 points, or 2.3 per cent, to 11,373.
Later in the week, a raft of US economic data — including consumer prices, retail sales and factory output — should provide a glimpse of the extent to which inflation has peaked and the economy has cooled down as the Federal Reserve moves closer to next week's policy meeting, which is expected to culminate in the second straight 75-basis-points interest rate hike.
Chris Zaccarelli — chief investment officer at Independent Advisor Alliance in Charlotte, North Carolina — said his position remains "cautiously optimistic", but investors' worry about a recession should not be ignored.
"We believe the headwinds to the economy and the market are substantial as inflation remains too high … However, we acknowledge that a lot of bad news has already been priced in, with the Nasdaq down and the S&P 500 continuing to decline from all-time highs," Mr Zaccarelli said.
On oil markets, Brent crude was down, trading at $US106.25 a barrel, by 10:26am AEST.
ABC/Reuters
