ASX retreats on inflation surprise; Woolies, Nine gain; Domino’s, WiseTech dive

The Australian sharemarket opened higher on Wednesday amid another flurry of corporate results after a solid session on Wall Street, where falling oil prices eased inflation worries, pushed bond yields lower and supported stock prices.

The S&P/ASX 200 was up 34 points, or 0.4 per cent, at 9198.60 as of 10.55am AEST, extending its gains from the past two sessions. Woolworths, Nine Entertainment and Flight Centre were among the companies reporting their latest results, while the latest inflation figures will be released at 11.30am AEST. The Australian dollar was trading at US71.65¢.

Woolworths jumped 4.5 per cent, leading consumer staples higher after saying its winter sales have been boosted by its wildly popular Ooshies collectables campaign. In the first eight weeks of the new financial year, food sales at its Australian supermarkets jumped 7.6 per cent, with the Disney plastic figurines expected to have generated up to 2 percentage points of that growth. Food sales rose 4.6 per cent in the year to June 30, helping the nation’s biggest grocer grow its net profit by 18.1 per cent to $1.14 billion and raise its final payout to shareholders to 52¢ a year, up from 45¢ a year ago. Coles, which on Tuesday said its sales had taken a hit from its rival’s Ooshies campaign, added 1.4 per cent.

The mining heavyweights also bolstered the ASX in early trade, with BHP - the nation’s biggest stock - up 1.3 per and its iron ore and copper rival Rio rising 1.4 per cent. Gold producers also advanced, with Evolution Mining up 1.7 per cent and Newmont up 2.4 per cent as gold held a five-day gain, with inflation concerns eased by a drop in US Treasury yields and lower oil prices as Iran and Oman discussed ways to reopen the Strait of Hormuz. Bullion traded around $US4660 an ounce, close to a three-month high struck in the previous session.

Nine Entertainment, the publisher of this masthead, jumped 5.6 per cent after the media company saw its full-year net profit from its continuing businesses rise 7 per cent to $142.4 million and revenue lift 3 per cent to $2.19 billion despite a tough advertising market. In a major step for the company , Nine has shifted its focus away from traditional broadcasting, emphasising positive results for its subscription streaming and publishing businesses and growth at QMS.

However, energy stocks limited market gains, with Woodside down 4 per cent and Santos down 2.4 per cent after Brent crude fell 2.2 per cent to $US86.60 a barrel this morning. The drop came even though tensions between the US and Iran seemed to ratchet higher after the Trump administration announced new sanctions to further hurt Iran’s economy. Brent’s price zigzagged between $US72 and $US102 last month as hopes rose and fell that the two nations could reach a deal that would allow oil tankers to freely exit the Persian Gulf again.

Travel agent Flight Centre slumped 5.8 per cent after revealing the conflict in the Middle East knocked $60 million out of its leisure profits in the fourth quarter. A spate of cancellations and a disruption of travel as the US-Israel war with Iran kicked on, “offset corporate’s full-year profit uplift”, the company said.