The ASX has fallen in line with overseas markets to close firmly lower, with technology stocks among the biggest losers. The Australian sharemarket slumped in a choppy session amid heavy falls on Asian markets and after a negative overnight lead from Wall Street, with tech stocks among the losers.
The benchmark S&P/ASX200 index closed 0.41 percent weaker at 7248.4, while the All Ordinaries Index dropped 0.53 percent to 7536.5
It followed solid falls in the US, where technology companies led a broad slide across the major indices as rising bond yields, and energy prices stoked concerns about higher inflation, Ord Minnett said.
“Investors were also worried regulatory crackdowns and a collapse at beleaguered property developer China Evergrande, whose shares were suspended in Hong Kong ahead of an announcement about a major transaction, could hurt an already fragile China economy and weigh on global growth,” the wealth management group said.
Among Aussie tech stocks, buy-now-pay-later market leader Afterpay lost 5 percent to $113.60, smaller rival Zip shed 4.82 percent to $6.52, machine learning group Appen backtracked 5 percent to $8.50, and data center operator NEXTDC slid 1.93 percent to $11.70.
Logistics software provider Wisetech Global retreated 1.7 percent to $52.67, and accounting software company Xero declined 2.1 percent to $134.59.
OMG chief executive Ivan Tchourilov said investors sought safety in gold stocks once again. St Barbara rose 5.19 percent to $1.42, Northern Star gained 3.48 percent to $9.22, and Ramelius Resources put on 3.24 to $1.43.
Evolution Mining inked a deal to sell its Mt Carlton gold mine in Queensland to Navarre Minerals for up to $90m and retain some exposure to the operation by acquiring a maximum shareholding Navarre of 19.9 percent. Shares in Evolution added 2.49 percent to $3.71, while Navarre remained in a trading halt at 9.2 cents.
ANZ backtracked 0.7 percent to $27.83, Commonwealth Bank firmed 0.32 percent to $105.50, National Australia Bank inched two cents lower to $27.78, and Westpac gave up 0.54 percent to $25.81. Rio Tinto weakened 0.38 percent to $97.13, and BHP declined 1.14 percent to $36.52.
“Industry shutdowns in China ahead of winter to preserve energy for peak heating demand are seeding supply chain disruption and taking commodity demand prospects down too,” UBS said in a research note.
Fortescue erased 1.25 percent to $14.22 after announcing ambitious targets, including a goal to achieve net-zero ‘Scope 3’ emissions by 2040 and for its new Fortescue Future Industries division to produce 15 million tonnes of green hydrogen annually by 2030. The market was underwhelmed by junior explorer Adavale Resources announcing it had received firm commitments to raise about $2m via a share placement, sending its shares tanking 10.77 percent to 5.8 cents.
Mr. Tchourilov said some investors chased profits, buying into oil producers after the oil price lifted overnight to about a 2014 high.
“Oil prices are making inflation fears more apparent, fuelling a tech sell-off today that was initiated in the US overnight,” he said.
“The OPEC cartel’s announcement to stay the course of gradually increasing oil supply is only compounding market distress.
“We can expect to see vocal opposition to the stance from larger nations if the crisis continues to worsen. “Still, we’re continuing to see price resilience from retail investors looking to buy the dip, which has so far buoyed the market from a major downturn.”
Origin put on 2.64 percent to $5.05, Woodside gained 3.98 percent to $25.08, Santos lifted 2.54 percent to $7.26, and Oil Search rose 2.3 percent to $4.44.
Yancoal added 3.67 percent to $3.67, and Whitehaven appreciated 2.37 percent to $3.45. Mr. Tchourilov said online marketplace Redbubble gained ground after an upgrade from analysts, jumping 7.19 percent to $4.47.
“The upgrade helped kick Redbubble into gear, which then looks to have gone into overdrive as a result of short positions held over the stock,” he said.
“Redbubble has consistently been one of the most shorted stocks on the ASX, and today, some of those shorters were forced to buy back positions, pushing the price up even further.”
Travel stocks were mixed, with Flight Centre appreciating 2 percent to $24.43, Webjet sliding 0.6 percent to $6.62, and Qantas giving up 1.2 percent to $5.74.
Qantas announced late on Monday it had extended its partnership with Emirates for another five years. Moody’s Investors Service published an in-depth report on Qantas, saying actions it had taken since the start of the pandemic, particularly boosting its liquidity and lowering its cost base, had strengthened its competitive position and business profile.
Moody’s said that Qantas had benefited from Virgin Australia’s repositioning as a mid-market carrier post its administration, leaving Qantas as the nation’s only airline with full service and low-cost offerings.
“We expect Qantas will emerge from the pandemic in a stronger position than before the pandemic,” the rating agency said. The Aussie dollar fetched 72.55 US cents, 53.37 British pence, and 62.56 Euro cents in afternoon trade. Published initially as an Australian sharemarket in the red, follows negative leads from Wall Street and Asian markets.