ASX edges up 0.26%, rising energy prices fuel inflation fears

The news: The S&P/ASX 200 closed up 19.4 points (0.26%) to 7,357.4 today despite a flat start in the wake of a sluggish Wall Street session. Financials held steady after the big four held onto most of yesterday's gains. Energy did well, but rising oil and gas prices have reignited inflation fears.

The numbers: The energy sector lifted 2.27% as Brent crude oil continued its upward trend past $US84 a barrel and potential strikes at three Australian LNG facilities sent European gas prices surging 40% overnight. AGL posted a $1.26 billion loss and lost 3.11% off its share price. Downer shares fell 6.39% after it reported a $368 million loss. The IT sector sank 1.79%, led by a 3.72% drop in the price of accounting software company Xero. QBE posted a $US400 million ($612 million) net profit for the six months to June, but shed 1.22% of its share price amid soaring premiums and a hard reinsurance market globally.

The context: Newcrest and REA Group are set to post full-year results tomorrow, and key US CPI and unemployment data will drop tonight. As oil and gas prices drag energy costs upward, recent predictions about an end to the inflationary cycle or interest rate hikes could prove short-lived.