Inflation fears triggers tumbling tech stocks: ASX closed 0.9% lower

Market Reports

by Melissa Darmawan

The Australian share market closed 0.9 per cent lower to mark its third straight day in the red, hitting a four-week low. The technology sector led the decline closing 4.7 per lower with Healthcare and Energy as the only two sectors advancing. Inflation jitters triggered a sell down on technology shares as investors fear the RBA might fast track the idea of raising interest rates, impacting shares with overstretched balance sheets. The local market followed the lead from Wall St after the indexes closed deep in the red after inflation figures rose 4.2 per cent year-on-year, the fastest pace since 2008. Accounting software platform Xero (ASX:XRO) plummeted 13 per cent despite its strong profit results today followed by buy-now pay-later Afterpay (ASX:APT) dived 5.4 per cent. The best performing stock was Whitehaven Coal (ASX:WHC) up 6.4 per cent while the worst performing stock was Perenti Global (ASX:PRN) tumbling 29.2 per cent following its downgrade to their FY22 outlook. Westpac (ASX:WBC) and NAB (ASX:NAB) closed lower, though trading ex-dividend while mining giants closed down as futures markets point to an 8 per cent drop. At the closing bell, the S&P/ASX 200 was 0.88 per cent or 62.20 points lower at 6982.70.

Futures

The Dow Jones futures are pointing to a rise of 53.00 points.
The S&P 500 futures are pointing to a rise of 10.55 points.
The Nasdaq futures are pointing to a rise of 51.75 points.
The SPI futures are pointing to a fall of 32 points when the market next opens.

Company news

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Cloud-based accounting platform Xero (ASX:XRO) has reported its net profit grew by almost 6 times to $18.4 million, according to the company’s FY21 results.

Medical imaging specialist Pro Medicus (ASX:PME) has inked a $14 million deal with The University of Vermont Health Network Inc (UVM) through the company’s subsidiary Visage Imaging.

Explosives systems company Orica (ASX:ORI) reports a 54 per cent drop in their half-year net profit to $77 million when compared to the same time last year.

GrainCorp (ASX:GNC) has upgraded its full year guidance following its strong half year results reinstating its interim dividend, due to a rebound in growing conditions on Australia’s east coast following the drought last year and a boost in global demand.

Australia’s largest telecommunications company Telstra (ASX:TLS) has been slapped with a $50 million fine for misleading conduct in sales activities with aboriginal customers and untimely response to remediate these shortcomings.

Metal detection and mining technology company Codan (ASX:CDA) has completed its $114 million acquisition of US-based company, Domo Tactical Communications.

Outdoor media advertisers oOh!Media (ASX:OML) reports a 34 per cent fall in revenue to $426.5 million in the 12 months to December as audience numbers dropped due to the restrictions and lockdowns cause by the pandemic.

Under-pressure casino operator Crown Resorts (ASX:CWN) has committed to cashless transactions in its Sydney casino operations, in a bid to improve the gaming giant’s legal standing with authorities.

Best and worst performers

The best-performing sector was Health Care, up 1.01 per cent while the worst-performing sector was Information Technology, down 4.72 per cent.

The best-performing stock in the S&P/ASX 200 was Whitehaven Coal (ASX:WHC) closing 6.36 per cent higher at $1.26. It was followed by shares in GrainCorp (ASX:GNC) and Omni Bridgeway (ASX:OBL).

The worst-performing stock in the S&P/ASX 200 was Perenti Global (ASX:PRN) closing 29.23 per cent lower at $0.69. It was followed by shares in Xero (ASX:XRO) and Afterpay (ASX:APT).

Broker moves

Ord Minnett rates logistics solutions company QUB Holdings (ASX:QUB) as an accumulate with a target price of $3.31. The upgrade from a hold after upgrading the company’s FY21 profit forecasts by 6 per cent. Also, the Federal Budget extended the asset purchase write-off for purchasers of eligible equipment until FY23, of which the broker believes this will lower the cash tax payable for the company raising the target price from $3.23 to $3.31. Shares in QUB Holdings (ASX:QUB) closed 0.34 per cent lower at $2.97.

IPOs

Mining exploration Australasian Gold (ASX:A8G) made their debut today after raising $6 million at $0.20 a share. Shares closed flat at $0.17.

Asian markets

Japan's Nikkei has lost 2.49 per cent.
Hong Kong's Hang Seng has lost 1.43 per cent.
China's Shanghai Composite has lost 1.04 per cent.

Commodities and the dollar

Gold is trading at US$1820.47 an ounce.
Iron ore is 3.00 per cent higher at US$237.57 a ton.
Iron ore futures are pointing to a fall of 8.00 per cent.
Light crude is trading $0.84 lower at US$63.61 a barrel.
One Australian dollar is buying 77.22 US cents.

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