Australian shares have risen modestly in afternoon trade, after dropping for the past four days amid a collapse in commodity prices.

By 2:10pm AEST, the benchmark ASX 200 was up 0.1 per cent to 7,472 points.

The Australian dollar fell as low as 71.27 US cents, around its lowest value since early November, before recovering slightly.

It lasted traded at 71.43 US cents.

Its 1.2 per cent slump comes as the greenback surged on bets the US Federal Reserve would start winding back its stimulus measures within months.

The local currency has fallen by about 7 per cent since the year began.

"The risk is skewed to a near‑term dip to below 70 US cents in our view," said Commonwealth Bank currency strategist Kim Mundy.

"A further widening in the Australia‑US 10‑year bond spread (currently around ‑16 basis points), slowing Chinese economic activity and the risk that the RBA [Reserve Bank] delays tapering its asset purchases can all weigh on the Australian dollar." 

Cochlear and Inghams profits jump

Some of the best performers on the Australian market were Redbubble (+8.5pc), Treasury Wine Estates (+5.6pc), Kogan (+4.3pc) and IPH (+1.8pc).

Inghams shares jumped 5.6 per cent after the poultry producer said its annual profit had doubled.

On the flip side, NRW Holdings (-6.3pc), BlueScope Steel (-4.5pc), Sims (-4.4pc) and Orocobre (-3.7pc) fell sharply.

Stockland's share price fell 1.4 per cent.

This was after the property development firm reported a $1.1 billion annual profit, thanks to a booming property market and government construction subsidies.

It was a big improvement over its restated loss of $21 million in the previous year.

The company will pay a final dividend of 13.3 cents per share (up 25.5 per cent).

Shares in Cochlear fell 6 per cent, after the hearing implant maker hiked its full-year dividend to $2.55 per share (up 59 per cent).

The company also reported its underlying full-year profit jumped 54 per cent (to $237 million) -- in line guidance but slightly below the market's very high expectations.

Its statutory profit of $326.5 million, was impacted by $89.8 million in one‐off gains related to a tax ruling.

The company also announced record sales of $1.5 billion, up 10 per cent in the year to June 30 -- partly driven by rescheduled surgeries taking place (after being delayed due to coronavirus shutdowns).

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Iron ore continues to tank

The nation's key export to China, iron ore, plunged 14 per cent overnight (below $US130 a tonne), and has been falling all week.

"The sell-off in iron ore futures continued as concerns of weaker economic growth in China weighed on sentiment," ANZ economists wrote in a note.

"The market has been hit with steel mill closures in China as authorities look to reduce emissions from the sector.

"This has already led to lower steel production, with July volumes down 8.4 per cent [over the past year] to 86.79 million tonnes.

"This fall could accelerate, with the China Iron & Steel Association calling for exporters to reduce overseas sales to ensure domestic supplies."

Iron ore has fallen deeply into a bear market, having plummeted by 43 per cent from its record high in May ($US233 a tonne).

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Sydney Airport's losses worsen

Sydney Airport reported its first-half loss nearly doubled, days after it rejected an improved $22.8 billion buyout offer from a consortium of infrastructure investors.

The $97.4 million net loss at Australia's biggest airport operator for the six months ended June 30 is worse than $53.6 million loss it announced last year.

The airport did not pay an interim dividend, and said it was open to considering a higher buyout offer from the Sydney Aviation Alliance (SAA) consortium comprised of IFM Investors, QSuper, Global Infrastructure Partners and AustralianSuper, .

Citi analysts expect dividends will be suspended until June 2022 due to a slow recovery from the pandemic, which has closed Australia's international border and led to domestic travel restrictions.

Sydney Airport's international traffic was down 91 per cent in the first half from last year's levels, which had been less affected by the pandemic in the first quarter.

Domestic traffic fell by 3.1 per cent relative to 2020 but was down 57.5 per cent on 2019 levels.

Gold, oil, and European stocks sink

Oil prices slipped for their sixth consecutive day, hitting lows not seen since May. They fell over fears of weak demand amid a rising US dollar and worsening pandemic, as the Delta variant spreads rapidly across the world.

Brent crude futures lost 2.6 per cent, to settle at $US66.45 a barrel. The most-active contract for US West Intermediate fell 2.6 per cent (to $US63.50 a barrel).

Spot gold also dropped to $US1,780.91 an ounce (down 0.4 per cent).

On Wall Street, stocks ended the day mixed, with defensive and tech-heavy stocks regaining ground after two days of losses.

The Dow Jones index fell 0.2 per cent (to 34,894 points), the S&P 500 gained 0.1 per cent (to 4,406) and the Nasdaq Composite added 0.1 per cent (to 14,542).

European markets fared much worse, with heavy losses for Britain's FTSE (-1.5pc), Germany's DAX (-1.3pc) and France's CAC (-2.4pc).

Luxury stocks with a large exposure to China's economy such as LVMH, Kering and Richemont dropped between 5.8 and 9.2 per cent on Beijing's plans to target excessive corporate profits and wealth inequalities.

"The increasing determination on the part of China to pour sand in the wheels of its own recovery story with a crackdown on various sectors, including tech and luxury, also appears to be weighing on sentiment, as well as on demand for raw materials," said Michael Hewson, chief market analyst at CMC Markets UK.

Beijing crackdown spooks Chinese tech giants

Shares in Chinese tech giant Alibaba dropped for their seventh day in a row to a record low on Thursday — down 5.5 per cent (to about $HK162).

It was a major drag on Hong Kong's benchmark index, the Hang Seng, which fell 2.1 per cent yesterday.

This was after China's Ministry of Industry and Information Technology on rebuked 43 apps for breaking data transfer rules. 

The alleged culprits include an e-reading app owned by Alibaba, Tencent's WeChat app, as well as others managed by travel giant Trip.com and video streamer iQiyi.

The move comes as Chinese authorities tighten regulatory oversight on a range of industries, with a particular emphasis on privacy, data and private tutoring.

In a statement published online, the regulator said the apps had illegally transferred users' contact list and location data, while also harassing them with pop-up windows.

MIIT stated that the apps will have until Aug. 25 to make rectifications, or else they will be punished in accordance with relevant laws and regulations.

Fed may start tapering in November

Minutes from the Fed's July meeting loomed over markets this week, which showed officials discussing easing back on unprecedented economic stimulus by year's end.

While there was some division among Fed officials, steady progress on the economic front, particularly in job gains, could clear the way for an upcoming taper to monthly bond purchases (colloquially known as "money printing").

The minutes solidified expectations the Fed would step back on stimulus before year's end barring some unpleasant economic surprise.

"Any decision to begin tapering asset purchases will be highly conditional on the data flow," said Bank of America Securities analysts in a note, moving forward their taper timeline to November (from January 2022).

"With the recent rise in COVID cases, the Fed will be monitoring the incoming data closely to make sure that the economy continues to make 'substantial further progress' toward its dual mandate (especially on employment) before announcing any changes to its asset purchase program."