Australian share flat as investors eye key US inflation data, Fed decision

The share market jumped to reach its highest level in almost three months on Monday morning before shedding early gains to finish flat at the end of trading.

The benchmark S & P/ASX200 added just 4.1 points, to finish at 7,199 at the closing bell. Meanwhile, the broader All Ordinaries reached 7,410.2.

The Australian dollar sank to US65.62c.

IG Australia market analyst Tony Sycamore said traders locally were closely monitoring US inflation data ahead of the next Federal Reserve board meeting, where it is expected to keep rates on hold.

“The ASX 200 has got an eye on what’s going on in the US, with their CPI and the FOMC week,” Mr Sycamore said.

“If there is any sort of frights in either of those, it could spell a pullback for US equities,”

Mr Sycamore added that headwinds coming from China were also adding to investors’ uncertainty.

“The signs of deflation in China, which we saw over the weekend, do obviously create some concerns,” he added.

On the benchmark, energy stocks were at the front of the pack after Bloomberg reported that the United States would commence refilling its strategic petroleum reserves, boosting investors expectations of increased demand.

Sector heavyweights tracked the increase in Brent crude prices which firmed by 0.8 per cent to $US76.47 a barrel.

Woodside and Santos advanced, adding 1.5 per cent to $30.26 and 0.6 per cent to $7.29, respectively.

Investor appetite is also being bolstered ahead of formal talks over a potential $80bn merger between the companies.

Material stocks weighed down on the index, shedding 0.6 per cent, as gold and lithium miners lost ground.

However, Rio Tinto and Fortescue held at near two-year highs, sitting at $128.90 and $25.94, respectively.

Late last week iron ore prices pushed past $US135 a tonne, defying traders expectations as China’s economy continues to falter.

In company news, Sigma Healthcare announced that it plans to merge with Chemist Warehouse, a move that would see the pharmacy retailer become an ASX listed firm worth more than 8bn.

Under the proposal, Chemist Warehouse shareholders will own 85.75 per cent of the new company. Sigma Healthcare shares remain in a halt, having last traded at 76.25c.

JB Hi-Fi said on Monday that it would “vigorously defend” a class action brought by Maurice Blackburn lawyers over the sale of extended ‘junk’ warranties that were allegedly worthless as customers already held the same rights under existing consumer protections. Shares traded 0.6 per cent higher to $49.35.

Real estate company Dexus was up 0.8 per cent to $7.35 after it named current chief investment officer Ross Du Vernet as its incoming chief executive. Mr Du Vernet succeeds long-serving boss Darren Steinberg as the commercial property landlord faces headwinds from soaring interest rates and volatile business conditions.

Kin Group has raised its offer to buyout Pact at 84c a share after previously offering a deal worth 68c a share. The small-cap packaging provider vaulted 22.6 per cent to 84c.