Tech rout ASX slams afternoon rally: ASX closes 0.2% lower

The Australian sharemarket managed to find its footing though edged lower after nerves mounted on the Omicron strain. The local bourse took a weak lead from Wall St with technology shares pressuring the index while defensives attempted to offset.

A glimmer of hope came through amid the US futures pointing to a rosier open while Asian markets are mixed, the Hang Seng is marginally higher on news that Chinese developers plan to sell bonds to raise almost $4 million (18 billion yuan), a sign that Beijing is slowly easing liquidity in the property sector.

Afterpay (ASX:APT) led the declines in the tech sector tumbing 6.1 per cent to $100.02 on news that its shareholder meeting was pushed back to a delay Bank of Spain yet to give its approval for the transaction. On Wall St, Square unveiled its plans to change its name to Block.

In the broader tech market, Xero (ASX:XRO) sank 5.1 per cent to $141.14, Iress (ASX:IRE) fell 2.1 per cent to $12.36, while EML Payments (ASX:EML) shed 3.2 per cent to $3.36.

Former Reserve Bank governor Glenn Stevens will pick up the baton from Peter Warne who will step down from the role in May next year as chairman of both Macquarie Group and its banking arm, Macquarie Bank (ASX:MQG). Shares added 1.5 per cent.
The other major lenders closed mixed with National Australia Bank (ASX:NAB) adding 0.8 per cent, ANZ (ASX:ANZ), marginally higher by 0.2 per cent while Westpac (ASX:WBC) bucked the trend closing 0.8 per cent lower. Commonwealth Bank (ASX:CBA) was the winner out the lot adding 2.2 per cent.

Meanwhile, Liontown Resources (ASX:LTR) tanked 16.2 per cent to $1.61 after resuming trading today. The lithium miner completed a $450m capital raising at an offer price of $1.65 per share and unveiled a share purchase plan raise up to $40 million to develop its Kathleen Valley Project in Western Australia.

In the casino space, Crown Resorts (ASX:CWN) rejected a sweetened takeover offer from Blackstone Group. The embattled casino operator said that the latest offer did not “represent compelling value”. Despite this, the Board has offered Blackstone the opportunity to undertake initial due diligence inquiries on a non-exclusive basis so they can formulate a revised proposal that would adequately reflects the value of Crown. Shares closed 0.7 per cent at $11.02.

Investors will now pivot their attention to European markets after their rally yesterday as they wait for the weekly jobless claims over at Wall St. Americans filing for first time unemployment claims fell to its lowest level since 1969 and have been resetting pandemic era lows. OPEC+ is set to meet for their 2-day meeting, with expectations that they will delay the increase in output amid the rise of the Omicron strain.

At the closing bell, the S&P/ASX 200 was 0.2 per cent or 11 points lower at 7,225.

Local economic news

The nation’s surplus fell to $11.22 billion in October from a downwardly revised AUD 11.82 billion in the prior month beating market consensus of $11 billion. Exports fell 3.0 per cent to $43,053 million driven by falls in iron ore prices. Imports fell 3.0 per cent to $31,833 million driven by a fall in imports of capital goods.

Retail sales rose by 4.9 per cent in October after a 1.3 per cent growth a month earlier. This was the second straight month of gains and the strongest pace since November last year, buoyed by the end of lockdowns in New South Wales, Victoria, and the Australian Capital Territory as per the Australian Bureau of Statistics (ABS).

New investor loan commitments rose 1.1 per cent to near record levels in October 2021 (seasonally adjusted), according to ABS.

Company news

Join me Stocks of the Hour here.

Gaming giant Aristocrat Leisure (ASX:ALL) is one step closer to sealing the deal to buy UK online gaming platform Playtech, after shareholders in the UK listed firm gave its nod of approval to sell its financial trading division, Finalto to Gopher Investments.

The Fair Work Ombudsman is taking Coles (ASX:COL) to court alleging the supermarket giant underpaid 7,800 staff last year by $115 million. The claim alleged that underpayments happened between 1 January 2017 and 31 March 2020 for staff who worked in regional and metropolitan areas across the nation as they worked extra hours than they were contracted.

The shareholders’ meeting for Afterpay (ASX:APT) slated for next week to seal the $39 billion takeover deal from US payments giant Square has been delayed. The date has been pushed back till the end of this year or early next year following regulatory approval from the Bank of Spain.

Supermarket giant Woolworths (ASX:WOW) has emerged as a rival buyer for Priceline owner API (ASX:API) with a $870 million offer, a move that would see one Woolies spread its wings into the healthcare space. The deal is to acquire 100 per cent of the shares in API at a price of $1.75 a share valuing the business at $872 million.

Fashion retailer Premier Investments (ASX:PMV) has seen sales recover over the first half of the new financial year despite lockdowns across New South Wales, Victoria, and New Zealand forcing the retail giant to close more than half of its stores.

Futures

The Dow Jones futures are pointing to a rise of 200 points.
The S&P 500 futures are pointing to a rise of 25 points.
The Nasdaq futures are pointing to a rise of 72 points.
The SPI futures are pointing to a fall of 21 points when the market next opens.

Best and worst performers

The best-performing sector was Utilities, up 1.5 per cent. The worst-performing sector was Information Technology, down 3.2 per cent.

The best-performing stock in the S&P/ASX 200 was Worley (ASX:WOR), closing 6.1 per cent higher at $10.08. It was followed by shares in AGL Energy (ASX:AGL) and Fletcher Building (ASX:FBU).

The worst-performing stock in the S&P/ASX 200 was Netwealth Group (ASX:NWL), closing 6.5 per cent lower at $15.19. It was followed by shares in Afterpay (ASX:APT) and Orocobre (ASX:ORE).

Asian markets

Japan’s Nikkei has lost 0.5 per cent.
Hong Kong’s Hang Seng has gained 0.1 per cent.
China’s Shanghai Composite has lost 0.1 per cent.

Commodities and the dollar

Gold is trading at US$1776.84 an ounce.
Iron ore is 1.3 per cent higher at US$101.40 a ton.
Iron ore futures are pointing to a rise of 1.2 per cent.
Light crude is trading $0.65 higher at US$66.22 a barrel.
One Australian dollar is buying 71.03 US cents.