Australian fast-food chain Domino's is losing ground on the local share market, as the global brand exits the country that made pizza famous.
The company that has the Australian franchise right to Domino's had lost more than 5 per cent of its share price on Friday afternoon.
It came after news broke that the global brand is exiting Italy, seven years after it opened its first store there.
The Italian and Australian arms are not connected.
The rise of delivery services such as Deliveroo, Just Eat and Glovo took away any advantage the American company thought it would have in Italy, according to a report to investors in 2021 by its Italian franchise holder ePizza SpA.
The same pressures are hitting the Australian takeaway sector too.
Domino's Pizza has over 18,500 stores worldwide in at least 90 countries. Most run as franchises, including in Australia.
Other big losers on the ASX 200 by mid-afternoon trade included Novonix which had lost 5.5 per cent.
Overall, Australian shares are faltering as global markets ponder whether the worst rate hikes and inflationary pressures are over.
At 1pm AEST, the benchmark was down 0.6 per cent overall. Nine of 11 sectors, including finance, were in the red.
Reporting season continues in Australia today.
Results out today include major insurer IAG.
It has announced its net profit is up $347 million. That comes after it lost more than $400 million the previous financial year.
Its profitability is up despite its overall revenue actually down $548 million overall on the previous financial year to $18.34 billion.
The insurer said its growth "predominantly reflected rate increases to offset inflationary pressures in the supply chain and natural perils".
It said its insurance margins were 7.4 per cent below expectations after it had to pay out a large amount of premiums for natural disasters.
This year has seen enormous amounts of claims linked to the east coast floods and storms. IAG itself was hit by more than $1 billion.
IAG had gained 1.2 per cent by morning.
It is giving out a dividend of 5 cents.
Investors not buying the inflation 'kool aid'
The ASX is trading down after Wall Street had mixed results overnight.
The Dow Jones closed flat, the S&P500 ended down 0.1 per cent, and the tech-heavy Nasdaq was off 0.6 per cent.
Wall Street surged the previous day when US markets rose after the world's biggest economy released its latest inflation data.
The data showed price hikes were starting to ease, which might soften concerns about another big rate hike of up to 0.75 per cent next month.
However, San Francisco Fed president Mary Daly said it was too early to "declare victory" on inflation despite the better figures.
Ms Daly also said a 0.5 per cent rate hike in September was currently her "baseline", and jobs and worker data that would be out soon also needed to be taken into consideration.
Oil up as people switch of costly gas
US 10-year Treasury yields have risen slightly in an indication that markets too are still betting on rate hikes.
City Index analyst Tony Sycamore said it looked like investors will still betting on the rate US hike to be as high as 0.75 per cent.
"The interest rate market is clearly not drinking the same post-inflation kool aid that the equity market has slugged on," he said.
"Financial markets initially reacted positively to [US inflation] data that showed inflation in the US is moderating, but gains then whittled away on concerns the market may have overreacted," ANZ also noted.
Meanwhile, oil is up again.
"Oil prices continue to increase (as) hopes of stronger demand strengthened," ANZ noted.
"The International Energy Agency [IEA] lifted its consumption estimate by 380kb/d, saying soaring gas prices amid strong demand for electricity is driving utilities to switch to oil."
The greenback dropped back to its post-CPI lows overnight, before paring some losses.
"AUD/USD briefly edged up towards 0.7150 thanks to a weaker USD and higher oil prices," ANZ noted.
"Risks to AUD are still to the downside in our view.
"While market expectations for rate hikes (by the Reserve Bank of Australia) have come off in recent months, market pricing still shows a peak in the cash rate well above 3 per cent."
Domino's stock falls on ASX, while local share market won't drink 'Kool Aid' on inflation - ABC News
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