Tech rout continues on weak ASX start: Aus shares 0.1% lower at noon

Market Reports

by Melissa Darmawan

Australian shares are attempting to recover from its 0.6 per cent fall in the morning as the tech rout continues. The choppy trade followed Wall St’s decline ahead of US and China's inflation figures this week after the jobs report mounts pressure for the Fed to act.

Investors are watching Omicron cases rip like wildfire as the nation posts a new record of over 100,000 new cases. Eyes are also on China after an outbreak in Tianjin sparked a mass testing drive in an effort to maintain its Covid zero policy.

Declines in Afterpay (ASX:APT), Xero (ASX:XRO), and WiseTech (ASX:WTC) are putting downward pressure on the tech sector as the worst decliner of the session as stocks are trading in the range of 2.3 to 3.5 per cent.

Energy, and materials are doing the heavy lifting to help offset the declines boosted by improved commodity prices, while utilities stocks are also higher. The other sectors are losing ground.

Woodside Petroleum (ASX:WPL) is trading 2.7 per cent higher, while Santos (ASX:STO) is up 1.6 per cent.

Fortescue Metals (ASX:FMG) is leading out of the iron ore miners, up 3 per cent, Rio Tinto (ASX:RIO) adding 2.8 per cent while BHP (ASX:BHP) is trading 2.5 per cent higher.

The long-term US bond yields have continued to march higher as the rotation away from tech names to cyclical sectors deepens as traders price in an earlier than anticipated interest rate hike.

Meanwhile, banks are trading mixed with Westpac (ASX:WBC) eking out a 0.09 per cent gain, Commonwealth Bank (ASX:CBA) is flat while Macquarie Group (ASX:MQG) shares are the biggest decliner after its fresh record high from Friday, falling 1.4 per cent lower erasing gains from that day.

At noon, the S&P/ASX 200 is 0.10 per cent or 8 points lower at 7,446.

Local economic news

Dwelling approvals rose 3.6 per cent versus the expectations of 5 per cent in November led by growth in the private sector dwellings as per the Australian Bureau of Statistics. The rise followed a fall of 13.6 per cent in October, seasonally adjusted.

Company news

Incitec Pivot (ASX:IPL) has inked a deal to buy French explosives maker Titanobel for $142 million. It’s expected to close by June this year. Shares are trading 2.3 per cent higher at $3.75.

Elsewhere, Sequoia Financial (ASX:SEQ) has revealed its latest acquisition adding a legal practice under its wing. Previously known as Topdocs Legal, now renamed Docscentre Legal, the $330,000 deal is earnings accretive as of today. Shares are flat at 71 cents.

ASX-listed battery maker Novonix (ASX:NVX) has progressed further on plans to list on Wall St's tech heavy Nasdaq. The news followed the first announcement in May after unveiling its plans to list on another exchange. Shares are skyrocketing 11.4 per cent higher at $10.42. 

Best and worst performers

The best-performing sector is Energy, up 1.6 per cent. The worst-performing sector is Information Technology, down 1.6 per cent.

The best-performing stock in the S&P/ASX 200 is AGL Energy (ASX:AGL), trading 7.3 per cent higher at $6.74. It is followed by shares in Novonix (ASX:NVX) and Magellan Financial Group (ASX:MFG).

The worst-performing stock in the S&P/ASX 200 is Life360 (ASX:360), trading 4.9 per cent lower at $7.94. It is followed by shares in Reliance Worldwide (ASX:RWC) and WiseTech Global (ASX:WTC).

Commodities and the dollar

Gold is trading at US$1795.57 an ounce.
Iron ore is 0.7 per cent lower at US$127.30 a ton.
Iron ore futures are pointing to a fall of 1.6 per cent.
One Australian dollar is buying 71.85 US cents.

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