AU Morning Wrap: ASX plunges 2.5%; Rio, Baowu form JV to develop Western Range

Wall Street Summary
US stocks wiped out almost four days of gains after August data indicated inflation remained stubbornly high, ending speculation the Federal Reserve might be able to ease its aggressive pace of rate increases.

The $S&P 500 Index(.SPX.US)$ slumped 178 points or 4.32 per cent. The $Dow Jones Industrial Average(.DJI.US)$ fell 1,276 points or 3.94 per cent. The $Nasdaq Composite Index(.IXIC.US)$ shed 633 points or 5.16 per cent.

The market's four-session winning run came to a crashing halt after headline inflation increased 0.1 per cent month over month, defying expectations for a decline of 0.1 per cent. Increases in rent, food and electricity offset a relief at the petrol pump.

Prices were 8.3 per cent higher than the same month last year. Economists expected a reading of around 8.1 per cent.

AU Market Watch
Australia's S&P/ASX 200 is set to tumble at the open after U.S. equities dropped on inflation data that suggested the Federal Reserve will remain on an aggressive rate-rise path. ASX futures are down by 2.3%, suggesting the benchmark index will could lose its 1.7% gain so far this week and potentially a chunk of last week's 1.0% rise. New Zealand shares fell 1.3% in early trade, strongly hinting at the likely path for the ASX 200 and other Asia-Pacific equities.

Australian shares plunged this morning. The $S&P/ASX 200(.XJO.AU)$ lost 2.49 per cent to 6834.9 as of 10:16 am.

Stocks to Watch
$Rio Tinto Ltd(RIO.AU)$: Rio Tinto and China Baowu Steel Group have agreed to enter into a joint venture regarding the Western Range iron ore project in the Pilbara, Western Australia.

$Link Administration Holdings Ltd(LNK.AU)$: Link Group has applied and obtained orders to adjourn the second court hearing relating to its proposed acquisition by Dye & Durham.

Ex-dividend: $Breville Group Ltd(BRG.AU)$, $Centrepoint Alliance Ltd(CAF.AU)$, $Costa Group Holdings Ltd(CGC.AU)$, $Lovisa Holdings Ltd(LOV.AU)$, $Mercury NZ Ltd(MCY.AU)$, $MAAS Group Holdings Ltd(MGH.AU)$, $NZME Ltd(NZM.AU)$, $Pepper Money Ltd(PPM.AU)$

Dividends paid: $APA Group(APA.AU)$, $Barrack St Investments Ltd(ECP.AU)$, $Heartland Group Holdings Ltd(HGH.AU)$, $NB Global Corporate Income Trust(NBI.AU)$, $Nickel Industries Ltd(NIC.AU)$, $Objective Corp Ltd(OCL.AU)$, $Reef Casino Trust(RCT.AU)$, $SHAPE Australia Corp Ltd(SHA.AU)$, $Winton Land Ltd(WTN.AU)$

Commodities
• Iron ore futures rose 0.5% to US$102.5 a tonne.

Fitch Solutions has downgraded its short-term iron ore price forecasts as demand weakness and tight energy markets, which are expected to continue into 2023, have ended the higher price environment seen in the first half of this year.

• Oil prices whipsawed between session highs of US$95 and lows of US$91.

"The oil market still remains tight and seems poised for further shortages as growth outlooks globally seem to be improving," said Oanda senior market analyst, Ed Moya.

"Oil demand in 2023 is expected to be supported by a still-solid economic performance in major consuming countries, as well as potential improvements in COVID-19 restrictions and reduced geopolitical uncertainties," OPEC said in a report.

• Gold prices plummeted back to US$1,700 as the blazing hot CPI print triggered a spike in the US dollar and Treasury yields.

Source: Dow Jones Newswires, AFR