Australian shares rose sharply higher on Wednesday, following a rebound on Wall Street, as oil prices fell after Russia indicated it was withdrawing some troops from exercises near Ukraine.
The benchmark ASX 200 closed 1.1 per cent to 7,285 points.
The Australian dollar was slightly higher at 71.5 US cents.
Gold fell to $US1,852 an ounce (down 1 per cent) on Wednesday, as safe-haven assets lost some of their appeal overnight.
Oil fell from seven-year highs. Brent crude was down $3.5 per cent to $US93 per barrel.
On Wall Street overnight, the Dow Jones index closed 1.2 per cent higher at 34,989 points. The S&P 500 gained 1.6 per cent to 4,471, and the Nasdaq Composite added 2.2 per cent to 14,140.
"In the back of everybody's minds, this is not going away. Putin might be saying one thing and just waiting for the right time to make a move," said Tom di Galoma, managing director at Seaport Global Holdings.
The pan-European STOXX 600 index rose 1.4 per cent, while MSCI's gauge of stocks across the globe lifted 1.3 per cent.
Santos pays highest dividend in six years
Gas producer Santos has reported that its annual underlying profit more than tripled, supported by soaring oil and gas prices and unfettered demand from Europe and Asia as global economies recover from the pandemic.
Santos completed its $8.7 billion ($US6.2b) takeover of Oil Search in December last year.
It posted a statutory net profit of $920 million ($US658m) for the year ended December 31 — a big improvement over the previous year's $357 million loss.
The company declared a final dividend of 8.5 US cents a share, its highest dividend since 2015.
Santos' share price fell 2.8 per cent to $7.19.
Fortescue Metals profit slides
Fortescue Metals reported a 32 per cent fall in first-half profit, hurt by higher material and labour costs due to the COVID-19 pandemic.
The company said its costs jumped by a fifth. Australian miners have been burdened by a shortage of workers in resource-rich Western Australia state due to lockdowns and border closures to control a recent wave of Omicron COVID-19 infections.
The world's fourth-largest iron ore miner posted a statutory net profit of $US2.8 billion (significantly lower than the $US4.1 billion half-year profit it announced a year ago).
Despite the sharp fall, the company said its profit this result was "the third highest in Fortescue's history".
It will pay shareholders a fully-franked interim dividend of 86 US cents per share (a 41 per cent drop compared to last year's dividend).
Shares in Fortescue fell by 2 per cent to $21.15.
Iron ore price tumbles
China's push to curb emissions and easing construction activity in its debt-laden property sector has led to prices of the steel-making commodity halving from record levels last year.
Analysts expect iron ore prices to stabilise this year, but remain some way away from last year's peak.
BHP said on Tuesday commodity price volatility will continue for some time, though outlook for demand and pricing remains strong.
Iron ore plunged 8.7 per cent to $US136 a tonne.
"Prices on the bulk commodity tumbled yesterday as China intensified its campaign to rein in prices for the steelmaking material after big gains in recent months," said NAB senior foreign exchange strategist Rodrigo Catril.
"Authorities in Beijing have stepped up actions to stop prices overheating amid renewed efforts to keep inflation in check."
CSL anticipates second-half loss
Biotech firm CSL is expecting a loss for the second half of the year and lower full-year earnings, hurt by poor plasma collection due to Omicron-related restrictions.
It also reported a 3 per cent fall in statutory half-year profit to $2.46 billion ($US1.76b).
Australia's priciest stock and among the five biggest companies by market value, CSL generates about 90 per cent of its profit from plasma collection, which has been hindered by the COVID-19 pandemic.
"I'm very encouraged by seeing increased social mobility and the beginnings of a return to a more normalised environment, " CSL chief executive Paul Perreault said in a statement.
CSL has forecast a full-year net profit in the range of $US2.15 billion to $US2.25 billion, lower than $US2.38 billion reported last year.
The company declared an interim dividend of $US1.04 per share, same as last year.
Shares in CSL jumped 8.5 per cent to $263.69.
Winemaker's profit hurt by China tariffs
Treasury Wine Estates posted a 7.5 per cent drop in first-half profit on Wednesday and missed market expectations, hurt by reduced shipments of its Penfolds brand to mainland China after Beijing slapped tariffs on Australian wine.
The world's largest standalone winemaker has had to re-direct supply to the United States, Europe and domestically after a diplomatic row between Canberra and Beijing effectively closed the lucrative Chinese market to Australian wine.
The company's sales also took a hit due to the Omicron variant surge, but it said the impact was somewhat offset by strong growth in its Americas and premium brands businesses, both of which reported a 19 per cent rise in their earnings before interest and tax.
"Penfolds growth was particularly strong in Asian markets outside of mainland China ... increasing distribution in Asia, domestic markets, Europe and the United States was a key execution highlight," the company said in a statement.
Treasury's net profit fell to $109.1 million in the six months ended December 31 (compared with $118 million a year earlier).
The Melbourne-based firm declared an interim dividend of 15 cents per share, unchanged from a year earlier.
Its share price jumped 11.7 per cent to $11.77.
Fed tipped to hike aggressively in March
US producer prices saw their biggest increase in eight months, in January, according to the Labor Department — another sign that high inflation could persist through much of this year.
America's producer price index (PPI) for final demand lifted by 1 per cent since December. On an annual basis, the PPI jumped 9.7 per cent in the year to January.
It remains to be seen whether the US Federal Reserve can get inflation under control by raising interest rates alone, Mr di Galoma said.
Investors also focused on the trajectories for major central banks to tighten monetary policy. Fed officials are split over how aggressively to raise rates.
Markets are pricing in a 65.5 per cent chance of a 50-basis point hike. They are also betting on a 34.5 per cent chance of a 25 basis point hike at the US central bank's March meeting.
"Energy prices are still trending upwards and that makes it more difficult for central banks to move less hawkish, so we still think risk assets are under pressure going forward and yields should be going higher," said Peter McCallum, rates strategist at Mizuho.
ABC/Reuters
