ASX falls as inflation fears spooks tech stocks; Afterpay hits 7-month low

Summary

  • The ASX200 trades lower by 6 points or 0.38% at 7018, crossing below its 20-day moving average.
  • Information Technology sector falls over 4% as US inflation fears kept investors jittery.
  • BNPL giant Afterpay drops as much as 7.5% to AU$ 81.85, its lowest level since 6 October 2020.

The benchmark index ASX 200 continued to trade in negative terrain on Thursday, extending losses for the third straight session, as persistent concerns over a potential spike in US inflation kept investors jittery. The S&P/ASX200 was trading down by 26.6 points or 0.38% at 7018, crossing below its 20-day moving average. The market witnessed a sharp sell-off in technology space, tracking Nasdaq's descent on Wall Street, as investors dumped high-growth stocks following US inflation data which raised concerns over interest rate hikes. 

On the sectoral front, eight out of 11 sectors remained under selling pressure, while Information Technology bleeds over 4%. Other sectors that were trading lower includes A-REIT, Financials, Energy, Telecommunications Services, Materials, Consumer Discretionary and Industrials. While Health Care was the best performing sector, gaining 0.91%, followed by Utilities and Consumer Staples.

Source: Jirapong Manustrong ,Shutterstock

Buy-now-pay-later (BNPL) space also witnessed selling pressure. The share price of BNPL giant Afterpay Limited (ASX:APT) declined as much as 7.5% to AU$ 81.85, its lowest level since 6 October 2020, as US inflation fears weighed on growth stocks. Other BNPL players, Zip Co Ltd (ASX: Z1P) and Sezzle Inc (ASX: SZL), Humm Group Ltd (ASX: HUM) also remained under stress.

Meanwhile, Australian energy companies Santos (ASX:STO), Woodside Petroleum (ASX:WPL) and Beach Energy (ASX:BPT) were trading higher, tracking rise in crude oil prices. Crude oil prices surged to an eight-week high on Wednesday amid signs of robust economic recovery and tumbled US crude exports.

                       

Gainers and Losers

The worst performing stocks on the ASX were Perenti Global Limited (ASX:PRN), Xero Limited (ASX:XRO), Afterpay (ASX:APT), NRW Holdings Limited (ASX:NWH) and News Corporation (ASX:NWS).

Some of best performing stocks were GrainCorp Limited (ASX:GNC), Whitehaven Coal Ltd (ASX:WHC), AusNet Services Limited (ASX:AST), Treasury Wine Estates Limited (ASX:TWE) and Elders Ltd. (ASX:ELD).

Shares in News

Source: © Sadeq68 | Megapixl.com

Shares of Australasian Gold (ASX: A8G) will be in focus as the gold mining company will make ASX debut today, after raising AU$5.5 million via initial public offering (IPO). The gold exploration company has issued 27,564,940 shares at an offer price of AU$0.20 apiece. 

The share price of Redcape Hotel Group Management (ASX: RDC) jumped over 4% to AU$1.02 after the company raised its earning guidance for FY21. 

Shares of Perenti Global Limited (ASX:PRN) slumped almost 20% to A$0.78, marking it as its worst performing day since March 23, 2020. As per the company, H2 2021 earnings are expected to be "softer" than H1 because of negative impact in the labour marked caused by COVID-19 disruptions.

Brookside Energy Limited (ASX:BRK) shares were trading 3.85% to AU$0.025 after it company started trading on the Frankfurt Stock Exchange. As per the company, the dual listing will support its strategy to broaden its overseas investor base at a time when global oil prices are rebounding. The Company also stated that it has reached a critical milestone with the starting of drilling of the high-impact Jewell Well in the SWISH AOI in the Anadarko Basin, Oklahoma, USA.

The share price of Aventus Group (ASX:AVN) was down 1.4% at AU$2.88 after the company on Wednesday said it will sell MacGregor Home, Queensland for AU$42.15 million to Stirling Property. In a separate development, Jefferies has raised its price target on the stock to AU$3.20 from AU$3.07 and maintained the rating on the company. The agency expects upside in AVN with strong underlying fundamentals, and FY21 guidance implying a 5.9% distribution per security yield and 15.3 times Price to Funds From Operations multiple.

CSR Limited (ASX:CSR) share price traded 0.5% lower at AU$6.13 after the company released financial results. The company has reported a full-year net profit after tax (NPAT) of AU$146.1 million, an increase of 17%. The robust result reflects improved performance in Building Products and increased Property contribution, the company said.

QX Resources Limited (ASX:QXR) announced firm commitments received from sophisticated and institutional investors to subscribe for a placement of 70 million shares at AU$0.015 each, amounting to AU$1.05 million before costs (Placement). The company also announced a share purchase plan to raise up to AU$2.0 million in which Australasian Capital Pty Limited will partially underwrite AU$600K. Combined proceeds are expected to accelerate exploration activities QXR’s Queensland based prospective gold projects. QXR shares were last spotted at AU$0.017.

Techgen Metals (ASX:TG1) has received composite assay results from its RC drilling program completed in April in El Donna gold project. TG1 Shares last traded at AU$ 0.250.

Tassal Group Limited (ASX:TGR) has acquired 800-hectare Mid Farm adjacent to its Northern Queensland based Proserpine prawn farm and Billy Creek property. The acquisition is expected to assimilate its farm holdings, now called as Proserpine farming precinct, boosting future prawn production. Following the announcement, Tassal Group shares were trading 0.14% lower at AU$3.655.

Global Market Update

On the global front, Asian markets continued losing streak for the third straight session on Thursday as concerns about rising inflation and higher bond yields baffled investors. The Japanese Nikkei 225 was the worst performer in the Asia Pacific region, falling 1.9%. It was followed by Hong Kong’s Hang Seng Index, which was down 1.07%,

New Zealand's benchmark S&P/NZX 50 trades lower by 0.8%, while China’s Shanghai Composite trades down by 0.6%.

Among others, Taiwan’s Taiwan Weighted Index is down 0.1% while Thailand’s SET Index trades 0.45% lower. The Korean KOPSI also falls by 0.43%.

Commodity Market Update

Oil prices slipped during mid-morning trade in Asia today, with Brent crude trading 0.3% lower at US$68.98 a barrel and US West Texas Intermediate (WTI) price down by 0.51% to $65.74 a barrel. On Wednesday, crude oil prices closed higher amid hopes that recovery in the economy will boost demand. The WTI crude surged by 1.2% to US$66.08 a barrel, the highest close since 11 March, while Brent crude gained 1.1% to US$69.32 per barrel, a close last seen on 5 March.

Meanwhile, Spot gold index was up by 0.18% to US$1,818.74 an ounce, paring early losses. In the overnight trade, gold prices dropped after US inflation data revealed a quicker-than-expected recovery.

Reacting to the news, gold miners such as Northern Star Resources Limited (ASX:NST) and Evolution Mining Limited (ASX:EVN) were trading in red, while Northern Star Resources Limited (ASX:NST) remained in positive terrain.   


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