Shares recoup losses to end flat as Aussie dollar rises

The local bourse turned around its morning losses to close flat as traders digested a slightly smaller than expected deceleration in domestic inflation that briefly pushed the Aussie dollar to its highest level this year.

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The S&P/ASX200 had been down as much as 62.3 points, or 0.77 per cent, in late morning trading.

But the benchmark index turned things around Wednesday afternoon to finish on the highs of the day at 8,071.4, up two-tenths of a point from Tuesday's close.

The broader All Ordinaries dropped 5.8 points, or 0.07 per cent, to 8,291.3.

The volatility came after the Australian Bureau of Statistics reported that consumer prices rose 3.5 per cent in the year to July, down from 3.8 per cent in the year to June but slightly more than the 3.4 per cent rate that economists had expected.

Betashares chief economist David Bassanese said that the Reserve Bank wasn't likely to be overly excited by the result, and it didn't add to the case for a rate cut anytime soon.

The government's new electricity subsidies helped lower annual inflation by two-tenths of a point, Mr Bassanese said, but they are only a temporary measure and will roll off.

The Aussie dollar briefly jumped above 68 US cents following the inflation readout, its highest level since December.  

Five of the ASX's 11 sectors finished lower on Wednesday and five finished higher, with health care flat.

The telecommunications and energy sector were the biggest movers, both falling 1.4 per cent.

Telstra, trading ex-dividend, dropped 2.5 per cent to $3.90, helping weigh down the latter, while in the energy sector the losses were more widespread.

Woodside fell 1.2 per cent, Whitehaven Coal dropped 3.0 per cent and Paladin Energy retreated 5.9 per cent as uranium miners gave back some of their gains from earlier in the week.

Tabcorp was the biggest loser in the ASX200, falling 15.0 per cent to a four-year low of 48c after the gambling company posted a $1.4 billion loss after taking a huge writedown on the value of its wagering assets.

Incoming managing director and chief executive, Gillon McLachlan, said Tabcorp had built solid foundations since its demerger but was only part way through a turnaround, and would clearly not meet its "TAB25" targets set two years ago.

Woolworths rose 3.3 per cent to $36.62 after the supermarket group announced that its full-year sales were up 3.7 per cent to $67.9 billion amid strong growth in its e-commerce and retail media segments.

EToro market analyst Josh Gilbert said shareholders would be pleased with the results, especially a special dividend that took its full-year dividends to $1.44 per share, which some would see as well deserved for sticking with the business through a difficult period.

In the heavyweight mining sector, BHP fell 1.4 per cent to $40.76, Rio Tinto dropped 0.9 per cent to $110.89 and Fortescue retreated 1.0 per cent to $18.44.

In the financial sector, the Big Four banks all finished higher after mostly being in the red earlier in the day.

ANZ rose 1.0 per cent to $29.92, Westpac added 1.1 per cent to $30.83, NAB advanced 0.9 per cent to $37.70 and CBA climbed 0.8 per cent to $138.57.

Buy now, pay later company, Zip, was the biggest gainer in the ASX200, rising 13.9 per cent to a more than two-year high of $2.38 after broker upgrades and chatter about a potential integration into Apple's wallet feature.

At 5pm, the Australian dollar was buying 67.96 US cents, from 67.86 US cents at Tuesday's ASX close.

* The benchmark S&P/ASX200 index finished Wednesday at 8,071.4, up two-tenths of a point from Tuesday.

* The All Ordinaries fell 5.8 points, or 0.07 per cent, at 8,291.3.

One Australian dollar buys:

* 67.96 US cents, from 67.86 US cents at Tuesday's ASX close

* 98.11 Japanese yen, from 98.27 Japanese yen

* 60.93 euro cents, from 60.78 euro cents

* 51.35 British pence, from 51.44 pence

* 108.97 NZ cents, from 109.08 NZ cents

Australian Associated Press