ASX 200 opens in red; Megaport falls over 11%

The Australian share market tumbled in opening session on Wednesday, tracking a fall in major stock indices in the US. IT and financial stocks were becoming a sizable drag in today’s session while weak copper and gold prices were also putting a pressure on some miners. The ASX 200 fell 0.69% or 51.3 points to 7,356.9 in the first 15 minutes of trade.

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Benchmark US Treasury yields which track short-term interest rate expectations, rallied to a two-year high, rising above 1% for the first time since February 2020. On the other hand, major stock indices faced selling pressure, falling more than 1% on Tuesday as market participants braced for the US Federal Reserve to be more aggressive in curbing monetary supply to tackle soaring inflation.

Wall Street's main indices tumbled on Tuesday due to weak results from Goldman Sachs which dragged the financial sector lower, coupled with a sell-off in tech shares as US Treasury yields rallied to two-year highs.

The Dow Jones Industrial Average took a hit of 1.51% to 35,368.48, while the S&P 500 fell 1.84% to 4,5877.1. The NASDAQ Composite ended the session 2.6% to 14,506.91.

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How has the market performed so far?

As of 11:00 AM AEDT, the ASX 200 continued to extend its fall, dropping 0.98% or 72.3 points to 7,336.5, while the ASX All Ordinaries index was down 0.94% or 72.7 points at 7,663.1. The A-VIX shot up by 4.47% to 14.25.

Data Source: ASX (as of 19 January 2022, 11:00 AM AEDT)

Megaport Limited (ASX:MP1) was the top loser in the morning session, falling 11.22% to AU$16.22, followed by Novonix Limited (ASX:NVX), which was down 7.83% to AU$9.41. A few stocks trying to keep the market from falling were Beach Energy Limited (ASX:BPT) and Virgin Money UK PLC (ASX:VUK), both gaining 2.93% and 2.81%, respectively.

On the sectoral front, there is an air of bearishness in today’s session, with 10 out of the 11 sectors trading lower. The IT sector is taking the biggest hit of 2.2%, followed by the healthcare and financial spaces, both losing 1.11% and 1.04%, respectively. Only the energy sectors in going against the grain with a 0.78% gain. 

Newsmakers

1. CIMIC Group Limited (ASX:CIM)

• CIMIC’s partly owned joint venture CPB Contractors has bagged a AU$350 million contract from the NSW government.
• Under the contract, CPB would be doing tunneling works on the Western Harbour Tunnel.
• The works will help integrate a tunnel into Sydney’s motorway network.

2. Nickel Mines Limited (ASX:NIC)

• The company has entered into an agreement with Sumber Energi Surya Nusantara.
• Nickel Mines would be implementing a 200 megawatts solar capacity, which will power its nickel processing in the country.
• It will help Nickel Mines to scale up its supply of renewable energy, required for its nickel processing operations.

3. BHP Group Limited (ASX:BHP)

• The management said the production results for copper for FY22 will come at the lower end of the guidance.
• The production for iron ore, nickel and energy coal remain on track, in line with the guidance.
• The unit cost guidance for Queensland Coal has been increased, reflecting lower expected volumes for FY22.

4. Lynas Rare Earths Limited (ASX:LYC)

• The company has exceeded a record AU$200 million in sales in the quarter ended 31 December 2021.
• Compared to the AU$202.7 million sales, the company reported a sales figure of AU$121.6 million in the previous quarter.
• The cash balance was also increased to AU$674.2 million at the end of the reported period.

5. Megaport Limited (ASX:MP1)

• The company added 123 new customers in three months ended 31 December 2021.
• Consequently, revenue inched up 8% to AU$26.6 million, compared to the previous quarter.
• Customers at the end of the reported quarter were 2,455, an increase of 123 or 5% QoQ.

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