ASX at 6-week low after 3rd day of losses: Wed 27 April

ASX at 6-week low after 3rd day of losses: Wed 27 April

ASX at 6-week low after 3rd day of losses: Wed 27 April

The Australian share market has fallen for the third consecutive session, this time with tech stocks and financials the biggest drag.

The benchmark S&P/ASX200 index closed on Wednesday down 56.8 points, or 0.78 per cent, to 7,261.2, while the broader All Ordinaries fell by 57 points, or 0.75 per cent, to 7,547.

The losses put the ASX200 back where it was on March 16, and down 2.5 per cent so far this year.

Saxo Markets Australian market analyst Jessica Amir attributed the selloff to the market pricing in a slowdown in economic growth, China’s new COVID-19 lockdowns and expectations that the Reserve Bank would have to hike the cash rate sooner than expected following Wednesday’s announcement that inflation was at a 20-year high.

“So it’s probably going to be a really bumpy ride for equities, that’s the overall theme,” Ms Amir said.

The losses also followed a tough day on Wall Street, where the tech-heavy NASDAQ composite fell by 3.95 per cent to hit a fresh 52-week low.

Australian tech shares followed suit on Wednesday, dropping down by 2.5 per cent, with Square down 6.2 per cent, Sezzle falling 7.2 per cent and Xero dropping 1.9 per cent.

Life360 sank 22.2 per cent to a 52-week low of $4.16 after the family tracking app company scrapped its plans for a dual listing in the United States “due to a change in market conditions”.

The big four banks were all down, with ANZ falling 2.6 per cent to $26.91, Westpac down 1.9 per cent to $23.45, CBA drooping 1.7 per cent to $103 and NAB retreating 1.7 per cent to $32.20..

The Reject Shop fell 15.1 per cent to $4.33 after announcing that its chief executive of two years had resigned, effective on Tuesday. Andre Reich said he wanted to pursue other opportunities after successfully executing a turnaround of the 367-store chain.

The heavyweight mining sector lifted 0.2 per cent after Tuesday’s brutal selloff as the price of iron ore rose for the first time in five days.

Fortescue Metals gained 1.7 per cent to $20.10, BHP added 0.8 per cent to $46.01 and Rio Tinto climbed 0.2 per cent to $108.96.

Syrah Resources gained 11.5 per cent to a three-month high of $1.84 after the Mozambique-based graphite miner said it was enjoying robust demand from electric vehicle manufacturers for the essential battery component.

But Northern Star dropped 5.9 per cent to a two-month low of $9.66 after the goldminer announced it was expecting lower production at a higher cost at its troubled Pogo mine in Alaska for this financial year.

Four of the ASX’s 11 official sectors managed to gain ground, with energy lifting the most, by 1.0 per cent.

Whitehaven Coal and Yancoal climbed 5.5 per cent and 2.0 per cent, respectively, on a lift in coal prices on strong demand and uncertainty about the future of Russian exports.

“You’ve got every man and his dog who are in coal production guiding for higher prices,” Ms Amir said.

Woodside Petroleum and Santo also rose, both by 1.0 per cent.

Meanwhile the Australian dollar recovered slightly against the greenback after the Australian Bureau of Statistics announced that consumer prices had soared 5.1 per cent in the past 12 months, leading ANZ and NAB to predict the Reserve Bank would lift the cash rate next week.

The Aussie was buying 71.71 US cents, down from 71.94 cents at Tuesday’s close, but up from the two-month low of 71.21 US cents it hit in overnight trading.

ON THE ASX:

* The benchmark S&P/ASX200 index finished 56.8 points, or 0.78 per cent, lower to close at 7,261.2 on Tuesday.

* The All Ordinaries index dropped 57 points, or 0.75 per cent, to 7,547.

CURRENCY SNAPSHOT:

One Australian dollar buys:

* 71.71 US cents, from 71.94 US cents when the ASX closed on Tuesday

* 91.73 Japanese yen, from 92.04 yen

* 67.48 Euro cents, from 67.21 cents

* 56.99 British pence, from 56.49 pence

* 109.08 NZ cents, from 108.56 NZ cents.

 

Derek Rose
(Australian Associated Press)