ASX 200 tumbles at open on weak cues from Wall Street

The Australian share market fell sharply at the open on Friday, as Wall Street continued to tumble with Dow Jones continuously falling for a fifth straight session, while NASDAQ Composite closed at the lowest level since June 2021. Mining giant Rio Tinto Limited (ASX:RIO) suffered a substantial 3% drop in its shares as Serbia revoked the licence for the Jadar lithium project, adding to pressure on the benchmark index. In the first 15-minute trade, the ASX 200 dropped 0.99% or 73 points to 7,273.5.

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Bond yields in the US retraced after a rapid rise this week along with Wall Street indices that continued to decline on Thursday as investors in big tech firms turned away over concerns on aggressive interest rate hike, owing to 7-year high crude oil prices and almost 40-year high inflation.

Wall Street's main indices almost closed at their lowest levels of the day on Thursday as selling intensified going into the close. The Dow Jones Industrial Average fell 0.89% to 34,715.40, while the S&P 500 lost 1.1% to 4,482.74. The NASDAQ Composite ended the session 1.3% lower at 14,154.02.

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How has the market performed so far?

As of 11:00 AM AEDT, the ASX 200 fell further and lost 1.27% or 93.5 points to 7,248.9, while the ASX All Ordinaries index was down 1.36% or 104.4 points to 7,564.5. The A-VIX shot up 9.97% to 15.07.

Data Source: ASX (as of 21 January 2022, 11:00 AM AEDT)

Paladin Energy Limited (ASX:PDN) was the top loser, falling 5.78% to AU$0.815, followed by a 5.76% fall in Whitehaven Coal Limited’s (ASX:WHC) shares to AU$2.78. On the gaining front, Pro Medicus Limited (ASX:PME) was leading with a gain of 1.27%, followed by Blackmores Limited (ASX:BKL) which gained 0.83% to AU$84.25.

On the sectoral front, all 11 sectors were trading in the red zone, making investors run for cover. The energy and material sectors were the biggest drag on the markets, falling 2.46% and 2.01%, respectively. The IT, utility and telecom spaces were all down over 1%.      

Newsmakers

1. Djerriwarrh Investments Limited (ASX:DJW)

• The company reported a net profit of AU$19.6 million for the half year ended December 2021, 142.2% up from AU$8.1 million in the previous corresponding period.
• Revenue from operating activities was AU$15.1 million, 57.2% up from AU$9.6 million in the previous corresponding period.
• The company also announced an interim dividend of 6.75 cents per share.

2. Nufarm Limited (ASX:NUF)

• The company’s subsidiaries Nufarm Australia and Nufarm Americas have raised US$350 million via issuing new bonds in the US.
• The bonds will be maturing in 2030 and will be paying a coupon of 5%.
• The proceeds will be used to repay debt on notes maturing in 2026.

3. Nuix Limited (ASX:NXL)

• Nuix’s revenue forecast for the first half of FY22 stood at AU$82 million - AU$85 million, slightly below the 1H FY21 revenue of AU$85.3 million.
• The management expects net loss in the range of AU$2 million–AU$2.5 million for 1H FY22.
• The company said non-operational legal costs remain significant and were higher in the last two months of the first half.

4. Tower Limited (ASX:TWR)

• Insurance company Tower is assessing the financial impact of a significant eruption of underwater volcano Hunga-Tonga-Hunga-Ha’apai and subsequent tsunami in Tonga.
• Some 2,500 of Tower’s 310,000 total customers are in Tonga.
• Tower’s reinsurance programme provides up to AU$873 million of cover for catastrophe events.

5. Whitehaven Coal Limited (ASX:WHC)

• The management has downgraded the company’s production guidance for FY22 by 5%, owing to COVID-19 and La Nina climate event.
• Coal production forecast for FY22 is now between 19 – 20.5 million tonnes as opposed to the previous estimate of 20 – 21.5 million tonnes.
• Whitehaven has also lifted its unit cost guidance to the range of AU$79 - AU$84 a tonne, from the earlier estimate of AU$72 - AU$76 a tonne.

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