Australian Stocks Rose Modestly to Start the Week

Australian shares added 23 points, or 0.3%, to 9,083 in early trading on Monday, reversing losses from the prior session as gains in materials, consumer services and healthcare lifted sentiment. A positive lead from Wall Street Friday also supported risk appetite, with investors looking ahead to Fed Chair Warsh’s remarks at the Jackson Hole symposium later this week amid elevated oil prices and multi-decade highs in global bond yields. However, gains were limited by caution ahead of Australia’s July inflation report, due Wednesday, after headline inflation eased to 3.8% in June from 4.0% but remained above the Reserve Bank of Australia’s 2%–3% target range. Governor Michele Bullock has recently stressed that underlying inflation remains too high and warned that further rate increases cannot be ruled out, amid volatility linked to the Middle East conflict. Among notable gainers were PLS Group (2.2%), Fortescue (2.1%), Aristocrat Leisure (1.7%) and South32 (1.6%).

Australia's ASX 200 shed 25 points, or 0.3%, to finish at 9,059 on Friday, unwinding the prior session’s gains as healthcare, tech, logistics, and commercial services dragged. Nerves sharpened ahead of July inflation data due next week, after June’s print eased marginally yet still above the Reserve Bank’s target band. Governor Michele Bullock recently warned that inflation remains elevated, flagging upside risks from commodity volatility tied to Middle East conflict. Still, stronger U.S. stock futures capped the weakness after Wall Street fell sharply Thursday amid higher Treasury yields. Tech names tracked Wall Street’s peers, with Wisetech Global (-2.1%) and Nextdc (-1.3%) lower. Goodman Group (-5.5%), Wesfarmers (-2.8%), and Sonic Healthcare (-2.0%) also lagged, while the big four banks pared losses to end mixed. Bucking the trend, Guzman Y Gomez soared 11.5% after reporting a 29.7% profit jump. For the week, local markets slipped 0.6%, marking their second straight weekly fall.

Australian equities inched lower around midday on Friday, hovering around 9,071 after closing modestly higher in the prior session, heading for the second straight weekly decline. A sharp drop on Wall Street overnight weighed on sentiment as long-dated U.S. Treasury yields resumed their march higher, after the government's moves to stem the recent bond market rout failed to ease investor fears about inflation. Locally, private sector activity slowed in August, with the flash Composite PMI slipping from July's 6-month high amid a decline in manufacturing output. Caution also grew ahead of July inflation readings next week. Meanwhile, employment unexpectedly fell in July, pushing the jobless rate to a three-month high. Tech, healthcare, and commercial services weighed though gains in energy minerals, utilities, and communications capped the downside. Steep losses were seen for Charter Hall (-6.3%), Pro Medicus (-3.3%), Wisetech Global (-2.9%), and Lynas Rare Earths (-2.2%).