Miserable session for ASX investors

The Australian equity market had its worst day since Russia invaded Ukraine in February, capping a miserable week for investors.

ASX investors were battered and bruised on Friday as a wild Wall Street selloff unfolded and knocked all but a handful of companies into the red.

A miserable end to a miserable week wiped another 2.2% – or about $50 billion – off the benchmark ASX 200 in the worst trading session since Russia invaded Ukraine in February.

ASX investors were in flight mode from the first minutes after an overnight drop in the United States badly hurt tech titans such as Tesla, Apple, Amazon, Meta and Netflix.

The wave of selling swept through local markets and sent the main index down 2.7% by midday, down $60 billion, to a nearly two-month low at 7161.4.

The nadir came after the Reserve Bank of Australia massively raised its cut average inflation forecast to 4.75% in December, after previously urging patience in the fight against soaring consumer prices.

The ASX 200 clawed back some ground but still finished a whopping 159.1 points lower at 7205.6 for a weekly loss of 3.1%.

Much like in the United States, local tech companies have taken the brunt of the selloff.

Afterpay owner Block Inc fell 1.8% to $142.91 after losing revenue overnight.

Accounting software company Xero was down 9.1% to $85.57, WiseTech Global was down 5.6% to $41.37, Appen was down 2.2% to $6.55 and Altium was down 4%. .6% to $30.64.

The broader All Ordinaries fell 171.6 points, or 2.3%, to 7467.6, while the Australian dollar fell back below 71 US cents at the local close.

Many attributed Friday’s decline to a Federal Reserve hangover.

Indeed, any enthusiasm shown by traders after Wednesday’s statement from the US Fed that pleased the market quickly evaporated as the reality of the fight against inflation to come returned.

Others pointed to the Bank of England and its overnight warning of a “significant negative impact” from the sharp rise in global energy and tradable goods prices, as well as a likely fall in incomes. actuals and corporate profit margins.

“The BOE basically said there would be a recession next year, somewhat at odds with statements by the Federal Reserve that a soft landing was possible in the United States,” said analyst Jeffrey Halley. ‘OANDA Asia-Pacific.

City Index analyst Tony Sycamore, however, noted that Friday’s selloff took place amid a long list of uncertainties, including the Fed’s aggressive tightening cycle, high inflation and a slowdown. of growth.

“While Fed Chairman (Jerome) Powell said (Wednesday) that he is confident he can engineer a soft landing for the US economy, he is attempting the central banker’s equivalent of landing an Airbus 380 on Bankstown Airport,” Mr Sycamore said.

“There is a considerable risk of overspending.”

Macquarie Group shares fell 7.8% to $186.90 even after the investment bank reported higher full-year profits and a higher dividend.

Managing Director Shemara Wikramanayake had also urged caution in volatile market conditions.

Commonwealth Bank fell 1.3% to $102.40, NAB fell 2% to $31.62, ANZ lost 0.6% to $26.76 and Westpac lost 0.8% to 23 $.83.

Blue chip mining sector BHP fell 1.4% to $46.80 and Rio Tinto fell 2.1% to $109.26.

Fortescue Metals managed to close at $20.83 and Falcon Metals was unchanged at 32 cents, but there were big losses for other gold, lithium, coal and base metal producers.

Blood giant CSL lost 2.9% to $268.16, Cochlear fell 4.2% to $219.39, Sonic Healthcare fell 1.5% to $35.94 and Pro Medicus fell 6.7% to $42.63 to weigh on the healthcare sector.

A rare pocket of joy could be found in consumer stocks, with supermarket Woolworths posting a slight gain to $38.15, rival Coles up 1% to $18.67 and Westfarmers up 0.3% to $49.60.

Fisher and Paykel gained 2.3% to $19.84 and other healthcare stocks PolyNovo jumped 4.1% to 90 cents to be the two best performers of the day.

#Miserable #session #ASX #investors

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