Australian shares have posted a fresh closing record, for the seventh time since the start of August.
The ASX 200 index finished trading flat (or 4 points higher) at 7,588. It climbed as high as 7,609 earlier in the day, before wiping out most of its gains.
The Australian dollar slipped to 73.6 US cents (down 0.2 per cent) by 4:40pm AEST.
Reporting season is ramping up, with some of the nation's largest companies, AMP, AGL Energy and Telstra, reporting their full-year results, while NAB announced a sharp rise in quarterly profit.
Some of today's best performing stocks were Downer EDI (+4.2pc), Insurance Australia Group (+6pc) and Premier Investments (+3pc).
Bulk grain handler Graincorp saw the biggest gains. The company's shares jumped 11.7 per cent after upgrading its earnings forecasts for the year — for the second time since May.
On the flip side, Rio Tinto (-6.9pc), Redbubble (-7.9pc), Goodman Group (-2.3pc), Xero (-2.7pc) and Appen (-4.9pc) suffered heavy losses.
QBE Insurance shares jumped 8.1 per cent (to $12.51), after the company reported a $712 million annual profit. It was a significant improvement over last year's $712 million loss.
The company will pay an interim dividend of 11 cents per share, said its material turnaround was driven by underwriting and higher investment returns.
It comes after US and European markets climbed to their highest levels ever overnight. Global market sentiment was boosted by the latest figures showing US consumer price increases slowed in July.
This helped to ease concerns that the Federal Reserve would imminently signal a scaling back of stimulus (in particular, its bond purchases).
Telstra to launch $1.35b share buyback
Telstra has declared that its business has reached a "turning point", while maintaining its dividend in spite of falling income.
The telco reported that its total income fell 11.6 per cent (to $23.1 billion) in the 2020-21 financial year, though its net profit went up 3.4 per cent (to $1.9 billion).
It will also pay a final dividend of 5 cents per share, along with a special dividend of 3 cents per share.
The company said it would distribute up to half of the net proceeds from its InfraCo Towers sale. Telstra plans to return up to $1.35 billion to its shareholders via an on-market share buyback.
"2021 was a really significant year for Telstra," its chief executive Andy Penn said.
"We delivered results in line with guidance and we are seeing the focus and discipline on T22 pay-off.
"It represents a turning point in our financial trajectory.
"We are clearly building financial momentum and I am very pleased to be able to say that our underlying business will return to full-year growth in FY22."
Telstra's share price went up 3.7 per cent (to $3.97).
AGL's earnings slump after 'challenging year'
AGL Energy has reported a $2.1 billion statutory full-year loss, while its revenue fell 10 per cent (to $10.9 billion).
Its financials were impacted by a surprise $2.7 billion write-down of its assets, driven by unprofitable wind farm deals earlier this year.
But if those "significant items" are excluded, it earned an underlying profit of $537 million (which was still a 33.5 per cent drop compared to the same period, last year).
Nevertheless, AGL has resolved to pay a final dividend of 34 cents per share, a sharp decline from last year's payout (54 cents per share).
Sliding wholesale prices, government pressure to cut retail rates and waning investor appetite for coal power also have battered the company's share price in the past two years.
This has contributed to its decision to split into two businesses (Accel and AGL Australia) by June 2022.
"Our FY21 result reflects a challenging year for AGL Energy as we realised the impact of lower wholesale electricity prices, reduced electricity generation output at peak periods, and the roll-off of legacy supply contracts in wholesale gas," said AGL chief executive Graeme Hunt.
AGL's share price fell 5.5 per cent (to $7.18).
AMP won't pay dividend
AMP said its first-half underlying profit jumped 57 per cent (to $181 million), but the wealth management firm will not pay shareholders an interim dividend.
It was helped by higher investment income, stronger earnings from its AMP Bank, and the release of credit provisions (that AMP previously set aside for potential bad debts associated with COVID-19).
However, on a statutory basis, its half-year profit fell 28 per cent (to $146 million).
AMP has been trying to repair its reputation since 2018, when the banking royal commission exposed systemic wrongdoing, including charging customers for services it did not provide and misleading regulators.
The company is trying to split off its most lucrative division, AMP Capital, which manages its infrastructure and real estate investments into a separate entity.
It comes after the AMP's failed talks with private equity firm Ares Management, which decided not to buy the entire company.
“Getting our demerger done will be a core priority," said AMP's new chief executive Alexis George.
"We've set out a clear timeline to establish and separate the AMP Capital Private Markets business this year, and complete the demerger in the first half of 2022."
AMP shares rose by 3.2 per cent (to $1.12).
NAB's quarterly profit jumps
National Australia Bank has reported that its June-quarter cash profit rose 10.3 per cent, as it was able to move funds set aside for potential COVID-19 losses back into profit.
Australia's banks quickly recovered from the pandemic as consumer confidence and the housing market was supported by record low interest rates and government spending, though they face some uncertainty after a recent surge in COVID-19 cases.
NAB, which agreed to buy Citigroup's local consumer unit this week, said it wrote back credit impairment of $112 million in the quarter, compared with bad debt charges of $570 million last year.
The nation's third biggest lender said cash profit for the quarter was $1.7 billion, compared with $1.55 billion a year earlier.
Chief Executive Ross McEwan warned that recent outbreaks of COVID-19 and resulting lockdowns were creating uncertainties for some customers, though he remained optimistic about the long-term outlook for Australia and New Zealand.
"The strong economic growth leading into this period, ongoing government support and customers' relatively healthy starting positions give us confidence that once restrictions are eased, the economy will again bounce back," he said.
The bank's common equity tier 1 (CET1) ratio, a closely watched measure of spare cash, rose to 12.6 per cent at the end of June (up from 12.4 per cent at the end of March).
NAB shares rose to $27.27 (up 0.2 per cent).
Global market rise on easing inflation worries
On Wall Street, the Dow Jones index rose 0.6 per cent (to 35,484.97), and the S&P 500 gained 0.3 per cent (to 4,448).
Both indices closed at fresh record highs, boosted in particular by the US Senate's decision to approve a $US1 trillion infrastructure package yesterday.
However, the tech-heavy Nasdaq Composite dropped 0.2 per cent (to 14,765).
Europe's STOXX 600 index lifted 0.4 per cent, and also hit record highs (for its eighth consecutive session).
The MSCI all-country index, a gauge of stocks across the globe, also rose to its highest level ever, and was last trading up 0.3 per cent.
America's consumer price index (CPI) lifted 0.5 per cent last month (after climbing 0.9 per cent in June), the US Labor Department said.
In the year to July, the CPI advanced 5.4 per cent (around a 13-year high).
However, the drop in the month-to-month inflation rate was the largest in 15 months — a tentative sign for some economists that inflation may have peaked.
"Certainly, the numbers show you more deceleration," said Steven Ricchiuto, US chief economist at Mizuho Securities USA.
"This number is going to put the Fed in a little bit of a quandary because they've gone out with all this rhetoric about tapering, about tightening rates, about being defensive and the inflation numbers aren't quite where they should be, but they’re certainly not showing that this thing is out of control."
Investors have been closely attuned to inflation pressures in recent months, concerned that a continual rise in prices could push the US Federal Reserve to begin to scale down its ultra-easy monetary policy stance earlier than anticipated.
Gold prices jumped following the inflation data. The precious metal's spot price rose to $US1,751.39 an ounce (up 1.2 per cent).
Meanwhile, oil prices lifted sharply after the Biden administration said it would not call on US producers to increase crude output, and that efforts to increase OPEC production were a longer-range plan.
West Texas Intermediate crude futures went up to $US69.25 per barrel (up 1.4 per cent), while Brent crude futures rose to $US71.44 a barrel (up 1.2 per cent).
ABC/Reuters
