Afterpay slumps to 13-mth low, ASX falls on tech lag closing 0.3% lower

The Australian sharemarket continued to lose steam after its initial 0.4 per cent spike dragged down by technology stocks eclipsing the rally in energy, and material stocks to close at session lows.

The local bourse was plagued by the wall of worries on digesting 35,054 new cases and eight deaths in NSW after the US recorded a record one million cases, amid a two-day leap in treasury bond yields as the prospect of interest rate hikes underpinned the retreat.

The cautious trading performed ahead of the US Federal Reserve’s meeting minutes as market participants look for any clues around the lift-off on interest rate hikes. The market has already priced in three rate hikes this year, however eyes are on any colour which might indicate a deviation from this amid the backdrop of any economic data which could speed up or slow down this schedule.

Traders are reviewing companies with earnings that are further out in the future, like tech stocks to determine the impact of real interest rates and what that actually means.

The move followed a blockbuster performance on the first trading day of the year after the index jumped 2 per cent, lifting the local bourse within record highs from mid-August last year.

The technology sector tumbled 2.9 per cent pressured lower by Tyro Payments (ASX:TYR) after shares fell 6.9 per cent lower at $2.72 on appointing two new board members with executive leadership experience from Apple and Google.

Afterpay (ASX:APT) closed 4 per cent lower at $80.51 slumping to its lowest level since 6 October 2020. The share price has lost half its value from its all-time high of $160.05 from February 2021 and moved in tandem with US payments giant Block who is slated to be the Aussie darling’s new owner.

The three worst performing stocks were from the healthcare space which saw the sector notched the second loser of the session.

Meanwhile, energy stocks soared for the second day closing at session highs after OPEC+ agreed to continue to boost output by 400,000 barrels per day, next month. They have pledged to continue with planned increases and may consider making adjustments if Omicron weighs on demand.

Santos (ASX:STO) rose 2.6 per cent, Origin Energy (ASX:ORG) up 1.5 per cent, Beach Energy (ASX:BPT) added 0.8 per cent while Woodside Petroleum (ASX:WPL) closed 0.4 per cent higher.

Meanwhile, miners firmed up with Rio Tinto (ASX:RIO) saw a 0.8 per cent gain, while BHP (ASX:BHP) and Fortescue Metals (ASX:FMG) closed 0.6 per cent higher.

Banks closed higher with Macquarie Bank (ASX:MQG) extending its record high from yesterday adding 2.1 per cent, Westpac (ASX:WBC) rose 0.8 per cent, National Australia Bank (ASX:NAB) and Commonwealth Bank (ASX:CBA) both gained 0.7 per cent while ANZ (ASX:ANZ) closed 0.2 per cent higher.

Precious metal players closed mixed with Newcrest Mining (ASX:NCM) rising 1.3 per cent, Northern Star (ASX:NST) added 0.5 per cent, while Evolution Mining (ASX:EVN) closed flat.

Japanese shares managed to firm up as the Yen clocked a five-year low against the greenback helping lift exporters with the likes of Toyota Motor and Sony.

China’s Shanghai Composite is down 0.8 per cent on track to close lower for its second day while Hong Kong’s Hang Seng dropped 0.9 per cent on a tech drag.

Traders are concerned that Tencent Holdings will keep trimming its stakes in a number of companies after it said last month that it would divest US$16.4 billion of its stake in JD.com. A move to reduce ties to China’s second-biggest e-commerce firm, amid pressure from Beijing’s regulatory crackdown on tech players.

Meanwhile, market participants are staring into a weak start on Wall St as futures point to a fall after the Dow reset a record high. Investors await the FOMC minutes ahead of a week of central bank members slated to talk in the US and in Europe.
 
At the closing bell, the S&P/ASX 200 was 0.3 per cent or 24 points lower at 7,566.

Local economic news

ANZ released its job advertisement figures in December which fell after two months of gains as Delta lockdown eased. Total job ads fell 5.5 per cent from an upwardly revised 17.2 per cent jump over the previous two months.

A record gain in the employment figure, up 366,100 in November was likely a significant factor behind the fall, but it can’t rule out some dampening effect from Omicron.

Job ads are 4.2 per cent above the pre-Delta-lockdown peak in June 2021 and 36.8 per cent above the pre-Covid level.

Company news

CIMIC’s (ASX:CIM) Leighton Asia has been awarded a $103 million contract to build a data centre campus for a technology firm in Indonesia. Construction is set to start this month and complete next year. Shares closed 0.2 per cent higher at $17.01.

Marine services provider MMA Offshore (ASX:MRM) has recently been awarded a number of new contracts including two significant long-term vessel contracts to the value of $74 million. There is also a potential value in excess of $91 million if the relevant option periods are exercised. Shares closed 12.5 per cent higher at $0.41.

Tyro Payments (ASX:TYR) welcomes two new board directors Claire Hatton and Shefali Roy starting today. Ms Roy was the chief operating officer and chief compliance officer at TrueLayer, while Ms Hatton spent seven years at Google Australia. Shares closed 6.9 per cent lower at $2.72.

After Johns Lyng (ASX:JLG) unveiled its plans to acquire US insurance provider Reconstruction Holdings in December last year, the building services group completed its $230 million capital raising and the acquisition as of 1 January this year. Shares closed 0.6 per cent lower at $8.84.

Futures

The Dow Jones futures are pointing to a fall of 74 points.
The S&P 500 futures are pointing to a fall of 11 points.
The Nasdaq futures are pointing to a fall of 71 points.
The SPI futures are pointing to a fall of 65 points when the market next opens.

Best and worst performers

The best-performing sector was energy adding up 0.8 per cent while the performing sector was information technology tumbling 2.9 per cent.

The best-performing stock in the S&P/ASX 200 was Adbri (ASX:ABC) closing 4.8 per cent higher at $3.03, followed by shares in Santos (ASX:STO), and Brambles (ASX:BXB).

The worst-performing stock in the S&P/ASX 200 was Pro Medicus (ASX:PME) closing 9.7 per cent lower at $56.95, followed by shares in Imugene (ASX:IMU), and Clinuvel Pharmaceuticals (ASX:CUV).

Asian markets

Japan’s Nikkei has lost 0.04 per cent.
Hong Kong’s Hang Seng has lost 0.9 per cent.
China’s Shanghai Composite has lost 0.8 per cent.

Commodities and the dollar

Gold is trading at US$1815.79 an ounce.
Iron ore is 2.8 per cent higher at US$122.90 a ton.
Iron ore futures are pointing to a rise of 0.5 per cent.
Light crude is trading $0.05 higher at US$77.04 a barrel.
One Australian dollar is buying 72.33 US cents.