ASX 200 closes 1.8% lower as US inflation numbers spooks markets

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  • ASX 200 fell 1.8% to 6941 points, the lowest closing level since late January.
  • Tech stocks shredded both in the US and Australia with the local tech sector dropping by 8.7% after latest US inflation numbers spooked markets.
  • Rising interest rates and elevated inflation levels may continue to keep driving investors’ sentiment over the coming days.

China’s lockdowns, supply chain disruptions, rising interest rates and geopolitical turmoil are few factors heavily impacting global share markets currently. Central banks are suggesting stringent measures to curb rising inflation, keeping investors constantly vigilant about evolving trends. As sinusoidal trends continue, investors can think long-term and maintain a strong temperament without letting fear or greed impact their investment decisions.

How did ASX 200 perform?

The Australian share market was imitating the trend seen on Wall Street last night, with technology stocks pulling down the strings of the benchmark index. Market sentiment seemed to have been injured, thanks to the latest US inflation report for April, which failed to provide optimum relief to investors apprehensive over potential interest rate hikes. While consumer prices showed some signs of cooling in April, it was not enough to convince investors that the Fed will not embrace aggressive rate hikes in the months ahead.

The Australian mining index witnessed a sharp fall amidst the broader market sell-off despite the recent recovery in oil prices and iron ore futures. Oil prices rebounded on supply worries following the EU’s proposed ban on Russian oil imports within six months.

At the end of today’ trading session, the ASX 200 closed sharply lower, dropping 123.70 points or 1.75% to 6,941.00 and setting a new 50-day low. Today was the first time the blue-chip benchmark closed below the 7000 point threshold since early March. Over the last five days, the index has lost 5.75% and sits 2.70% above its 52-week low.

All 11 sectors ended lower. The session's top sector, utilities, was lower by -0.58%, continuing its -4.03% decline for the last five days.

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Who gained? Who lost?

The top performer today was Orica Limited (ASX:ORI), up over 4%. It was followed by AGL Energy (ASX:AGL), up over 1%. Other gainers of the day were Ampol Limited (ASX:ALD), Polynovo Limited (ASX:PNV), and Amcor Plc (ASX:AMC).

On the other side, in the red zone of the ASX 200, Altium Limited (ASX:ALU)was the biggest laggard, its stock down over 16%. Other stocks in this zone were Life360 (ASX:360), Xero Limited (ASX:XRO), Novonix (ASX:NVX) and Megaport Limited (ASX:MP1).

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Asian and global market

Shares traded lower in Asia after declines in stocks in technology companies led heavy selling on Wall Street following the release of price data that was worse than expected. The US Labor Department report showed inflation slowed a touch in April, down to 8.3% from 8.5% in March.

Hong Kong’s benchmark dipped 1.5%, Tokyo's Nikkei 225 gave up 0.8%, The Shanghai Composite index edged 0.2% lower  and South Korea's Kospi slipped 0.3%.

On Wall Street, the three major indexes seem to be on pace for another sharp weekly loss. Overnight, The Dow Jones Industrial Average dropped 1%, The Nasdaq fell 3.2%  and the S&P 500 finished 1.6% lower.



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