The S&P/ASX 200 (ASX: XJO) weakened throughout the session, ultimately finishing 0.7% lower on Wednesday.
Every sector fell apart from property, which added 0.9%, with the local tech sector once again the hardest hit, down 2.1% as Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P) continue to face global competition.
Both Vicinity Centres (ASX: VCX) and Scentre Group (ASX: SCG) rallied over 2% after lockdowns ended and the Victorian Government released another round of business and landlord support.
Rio Tinto’s dividend bonanza
All eyes were on the mining sector with Rio Tinto (ASX: RIO) reporting its FY21 result after the market closed, delivering what can only be described as a dividend bonanza.
The company announced a 262% increase in its dividend to US$5.61 per share, totalling US$3.76 billion being returned to shareholders.
In a smart move, management split the dividend into an ordinary payment of US$3.76 and a special dividend of US$1.85 to ensure expectations of future payments aren’t at this level.
Rio Tinto shares outperformed the market on Wednesday, falling just 0.2% with management also announcing a $2.4 billion investment into a Serbian lithium project as it seeks to capitalise on battery demand for the economy.
BHP outbids Twiggy
Staying with commodities, BHP Group Ltd (ASX: BHP) fell 1.7% despite announcing its decision to acquire Canadian nickel, copper and platinum miner Noront Resources.
The company had received a bid from Twiggy Forrest’s Wyloo Metals in May and represents another pivot to secure a future in the battery metal sector with nickel in particular set to see massive demand in the next decade.
Spark offer increase
Private equity firm KKR increased its offer for Spark Infrastructure Group (ASX: SKI) to $2.95 per share, sending the share price 5.4% higher but still at just $2.74.
The offer represents a 26% premium but in my view, investors best hold on until the share price trades closer to $2.95.
Inflation hits 13-year high
Australia has followed the rest of the world with inflation rising to 3.8% in the 12 months to June, 0.8% of which came in the preceding quarter.
It is abundantly clear that this is transitory inflation, caused primarily by the base or comparative effects from this time last year.
For instance, in 2020 childcare costs were zero and energy prices were some 50% lower than today.
This is evidenced by the underlying inflation measure, known as the trimmed mean, which strips out irregular or one-off price increases, which registered at just 1.6% for the financial year.
ASX 200 today
Looking ahead, the ASX 200 is expected to open higher on Thursday, following a mixed lead from US markets overnight.
The Dow Jones trended lower but the tech-heavy Nasdaq jumped 0.7% as the market digested booming earnings reports from Alphabet (NASDAQ: GOOGL) and Apple (NASDAQ: AAPL).
