Following US sell-off, ASX 200 closes 1% lower

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Following US sell-off, ASX 200 closes 1% lower

ASX 200 closed lower today
Image source: ©2022 Kalkine Media®

Highlights

  • The ASX 200 closed 1% lower today, thanks to a sell-off in US stocks overnight.
  • Investors withdrew from risk assets; government bond yields scaled up.
  • Asian stocks also traded in the red zone.
  • The global cryptocurrency market capitalisation dipped by 0.49% in the last few hours.

Looking at the local bourse’s performance today, Australian blue chips fluctuated to the lowest level of the day with an hour of trading left. The index fell sharply in early trade, improved marginally, then dropped to the lowest level of the day just before market close- resonating the performance of US peers overnight. Well, this certainly demonstrates a global shift away from risk assets, thanks to the threat of interest rate increases from the US Fed that has also pushed up government bond yields.

Eventually, the ASX 200 closed lower, dropping 76.30 points or 1.03% to 7,332.50 and crossing below its 125-day moving average. The index has lost 1.43% for the last five days but sits 3.93% below its 52-week high.

Sectors ended mixed. Eight of 11 sectors were lower. Energy was the best performing sector, gaining 0.7% and 2.63% for the past five days.

Top gainers & losers

The best performers today were Appen Limited (ASX:APX), Harvey Norman (ASX:HVN), Virgin Money (ASX:VUK), Premier Investments (ASX:PMV) and SkyCity Entertainment (ASX:SKC).

In the red zone of the ASX 200, Megaport (ASX:MP1) was the top laggard. Other stocks in decliner list were Novonix Limited (ASX:NVX), Allkem Limited (ASX:AKE), Imugene (ASX:IMU) and Paladin Energy (ASX:PDN).

Asian & global market

Asian share markets fell today. This was majorly propelled by US Treasury yields that hit fresh two-year highs, upsetting people about inflation. Investors are also bracing for tighter US monetary policy.

Nervous investors

©2022 Kalkine Media®

MSCI's broadest index of APAC shares outside Japan imitated the muteness, trading down 0.1%. Japan's Nikkei slithered 1.8% as technology stocks fell and uncertainties over new curbs on businesses.

South Korea's Kospi lost 0.3%, China's blue-chip index was flat. However, Hong Kong's Hang Seng rose 0.1%.

In the US, tech and banking stocks brought down key US market indices. The Dow Jones Industrial Average lost over 540 points after Goldman Sachs shares sold off. Besides, market expectations continue to price for a more violent Fed tightening anticipated ahead.

To add on to jitters, oil prices hit their highest since 2014 amid an outage on a pipeline from Iraq to Turkey and global political pressures, fueling fears of inflation.

Crypto market performance

The global crypto market cap dipped by 0.49% over the last few hours to USD 2.01 trillion, while the trading volume rose by 0.07% to USD 77.53 billion.

In other news, Crypto asset manager Hashdex has received approval to launch what it deems to be the “world's first” DeFi ETF, to trade under the ticker DEFI11. This will track the price of the CF Benchmark's DeFi Modified Composite Index.

Besides, tech giant Intel may soon enter the Bitcoin mining business, starting with the reveal of a new Bitcoin mining “Bonanza Mine” chip at February’s International Solid-State Circuits Conference.

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