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ASX up, Lowe to tackle inflation worries

·4-min read

Shares had modest improvement to start the week while Reserve Bank governor Philip Lowe is preparing to allay investors' fear of inflation.

The ASX was less than half a per cent higher for most of Monday and likely benefited from better than expected economic data from China.

Factory output and retail sales grew more quickly than expected in October in an economy that has been plagued by supply troubles and inflation.

Mr Lowe will try to quell concerns about the latter in Australia on Tuesday, when he speaks to economists.

The biggest annual increase in underlying inflation in six years was recorded for the September quarter.

The 2.1 per cent rate was blamed on supply chain disruption from pandemic shutdowns and a soaring housing market.

Yet the Reserve Bank board does not expect prices to rise as rapidly as in the US, where inflation has reached five per cent.

Westpac senior currency strategist Sean Callow said the recent increase in unemployment supported the RBA's moderate forecast. The jobless rate rose from 4.6 per cent to 5.2 per cent.

Mr Callow said the slack in the labour market supported a forecast of only gradual improvement in wages and inflation.

That thesis will be tested on Wednesday when wage price data for the September quarter is due.

On the ASX, healthcare shares proved best of all the categories. Most were higher.

Materials shares were up about one per cent after the first couple of hours trading but closed little changed.

The benchmark S&P/ASX200 index closed up 27.1 points, or 0.36 per cent, to 7470.1 points.

The index remains within 200 points of record heights.

The All Ordinaries closed up 32.4 points, or 0.42 per cent, to 7798.2 points.

The banks were down early but improved to close little changed. NAB was the main weight as it traded ex-dividend and lost 1.57 per cent. ANZ was best of the big names and gained 0.74 per cent.

Agribusiness Elders posted a higher full-year profit and dividend, helped by the purchase of a group of farming shops.

The company declared net profit after tax was up 22 per cent to $149.8 million for the year to September 30.

The figures were helped by the first full financial year of ownership of Australian Independent Rural Retailers.

Shares were down 0.74 per cent to $12.01.

In mining, Fortescue shares rose about three per cent early but closed better by 1.21 per cent to $15.94. BHP and Rio Tinto each shed less than one per cent.

Woodside Petroleum will sell a stake in the Pluto liquefied natural gas facility in Western Australia.

Woodside is selling a 49 per cent stake to Global Infrastructure Partners and will retain a 51 per cent stake.

Shares were better by 1.12 per cent to $22.50.

Airline Regional Express has resumed flights from Melbourne to Sydney as well as other routes.

Flights from Melbourne to Brisbane will begin on December 17 as the Queensland capital becomes the fifth capital city in the airline's network.

Shares were up 3.04 per cent to $1.52.

Computer chip maker BrainChip dived after the company named a new chief executive.

Former Compaq and HP executive Sean Hehir will join at the end of the month.

Shares fell about nine per cent to 55 cents.

The Australian dollar was buying 73.45 US cents at 1715 AEDT, easing from 73.86 US cents at Friday's close.


* The benchmark S&P/ASX200 index closed up 27.1 points, or 0.36 per cent, to 7470.1 points on Monday.

* The All Ordinaries closed up 32.4 points, or 0.42 per cent, to 7798.2 points.

* At 1715 AEDT, the SPI200 futures index was lower by six points, or 0.08 per cent, at 7463 points.


One Australian dollar buys:

* 73.45 US cents, from 73.86 cents on Friday

* 83.62 Japanese yen, from 83.27 yen

* 64.11 Euro cents, from 63.74 cents

* 54.69 British pence, from 54.54 pence

* 104.12 NZ cents, from 103.98 cents.

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