Al-anwar Newspaper English news in Australia
Wednesday’s reprieve appears to have been fleeting for ASX investors with the local sharemarket resuming a worrying three-week spiral at Thursday’s open.
The benchmark ASX 200 fell by as much as 82.8 points, or 1.2 per cent, in the first hour to dip back below the key 7000 level and continue what has been a poor run of form.
Cryptocurrencies have fared little better amid the fresh market turmoil, while the Aussie dollar remains subdued under 70 US cents.
The local index managed to stem its recent savage losses on Wednesday thanks to gains for large mining companies such as BHP, Rio Tinto and Fortescue Metals.
But not even the iron ore contingent could lift the bourse into positive territory in morning trade.
Much like in the US, local tech stocks were hit hard.
Afterpay owner Block Inc plunged by nearly 20 per cent to $102 while accounting software firm Xero slumped 9.8 per cent to $78.12, its lowest since April 2020 when it was recovering from the Covid-19 sell-off.
Altium dropped 8.1 per cent to $2781, Megaport was 6 per cent down at $6.85, Airtasker fell 4.4 per cent to 43 cents, and Zip Co was 3.8 per cent lower at 96.2 cents.
Energy and materials stocks were helping prop up the index after a rebound in commodity prices.
But the market was also being weighed down by banking stocks, consumer firms such as Woolworths, Wesfarmers and Coles, and healthcare names such as CSL and Resmed.
The ASX 200 was last 0.8 per cent down at 7005.6, having slipped as low as 6981.9.
Mounting inflationary pressures around the world have triggered a steep central bank hiking cycle, something which has dented the appeal of riskier assets such as shares.
Strict Covid-19 lockdowns in China have also cruelled the value of Australia’s resources sector, contributing to a near nine per cent decline to two-month lows on Tuesday.
Traders on Thursday morning took their cue from Wall Street, where stocks tumbled overnight on worrying inflation data.
IG Markets analyst Hebe Chen said US consumer prices rose at a slower rate in April – easing from 8.5 per cent to 8.3 per cent – but impatient traders were not happy with the pace.
Many fear that with inflation remaining near 40-year highs the US Fed now has no choice but to deliver a bigger 75 basis-point rate hike, having seemingly taken this option off the table.
“The (data) that came out last night was still stronger than the forecast … suggesting the price pressure will persist at higher levels for longer even if it’s already peaked,” Ms Chen said.
As is typical when inflation is high and steeper rate hikes loom, growth stocks have been badly affected.
This included an 8.3 per cent dive for Elon Musk’s Tesla, a 5.2 per cent drop for gadget maker Apple, a 3.2 per cent fall for Amazon, and a 6.4 per cent decline for Netflix
Fellow Nasdaq giant Meta Platforms fell 4.5 per cent, Microsoft was down 3.3 per cent, and Google parent Alphabet lost 0.5 per cent.
