Australian stocks to start lower after modest lift on Wall Street

The news: The Australian sharemarket is set to start lower after major US indices gave up early gains after mild inflation data to close modestly higher.

The numbers: The Dow ended up 0.15% after initially climbing as much as 1%, the broader S&P 500 index edged 0.03% higher, while the tech-heavy Nasdaq gained 0.12%. US annual CPI for July rose slightly lower than expected at 3.2%. ASX 200 futures were trading 20 points or 0.27% higher at 7281 at 0700 AEST on Friday.

The context: Investors are jittery because while the milder US inflation data suggests the Federal Reserve may not raise interest rates again, it also raises the possibility of it keeping rates higher for longer. That could encourage traders to book profits after five months of gains. In the Australian market, traders will be eyeing earnings for gold miner Newcrest and REA Group among others.

What they said: "A lot of tech valuations are predicated on rates falling, but there is nothing in the numbers, in my mind, to say that we're cutting rates - in fact, we may even see another quarter-point increase before the end of the year," said Abella, noting some big tech valuations were already lofty" - Gregg Abella, CEO of Investment Partners Asset Management.