Tech shares tumble while energy leads: ASX closes 0.8% lower

Inflation spikes to 5.1%

Australian inflation came in hotter-than-expected today, with trimmed mean well above the RBA’s 2 to 3 per cent target band and firming bets the central bank will begin lift-off in May rather than June. This came after the latest consumer survey from ANZ and Roy Morgan showed a further dip in consumer confidence.

As expected, the inflation figures boosted the Aussie dollar while shares retreated after the headline figure rose to 5.1 per cent in the March quarter, compared with a year prior, beating forecasts of 4.6 per cent and following the 3.5 per cent increase in the fourth quarter. The most significant price rises were dwelling construction costs, up 5.7 per cent, and automotive fuel prices, up 11 per cent.

Tech shares tumble, Energy leads 

The Australian sharemarket spent all of Wednesday’s session in the red after a meltdown across the broader market. When broken into sectors, technology shares got hammered, along with consumer staples, financials and healthcare, while energy was the best performer. 

Life360 (ASX:360) led the fall as the worst performer following its quarterly cash flow report, which guided towards a US$32 million to US$38 million loss for the calendar year. Shares closed 29.4 per cent lower at $3.77. Afterpay owner Block (ASX:SQ2) fell 6.1 per cent to $139.83, Zip Co (ASX:Z1P) closed 4.7 per cent lower at $1.02 and EML Payments (ASX:EML) dropped 5.3 per cent to $1.58 after issuing a profit downgrade yesterday, which saw shares plunge 38 per cent. Canaccord dropped EML Payments’ (ASX:EML) rating to a hold from a buy.

Major banks weighed, led by ANZ Banking (ASX:ANZ) down 2.6 per cent to $26.91, while National Australia Bank (ASX:NAB), Macquarie (ASX:MQG) Commonwealth (ASX:CBA) and Westpac (ASX:WBC) all closed between 1.7 and 1.9 per cent lower.

Elsewhere, The Reject Shop (ASX:TRS) plunged 21.6 per cent today to $4.00 after news broke that its chief executive officer Andre Reich has stepped down after joining the company just over two years ago.

Northern Star’s (ASX:NST) financial year 2022 production guidance remains unchanged at between 1.55 million ounces and 1.65 million ounces despite input costs and Covid-19 related challenges. During the March quarter, the gold miner sold 380,075 ounces of gold, with a total sales revenue of $937 million. Northern Star had a net cash position of $433 million at the end of the period, while the company warned investors of rising production costs. Shares closed 5.4 per cent lower at $9.66.

Coronado Coal (ASX:CRN) posted record quarterly revenue following higher coal prices during the March quarter. During the quarter, it reported revenue of $947 million, up 22.3 per cent from the prior quarter. It also reported a record metallurgical coal price of $267 a tonne, up 24.4 per cent from the prior quarter. Shares closed 2.3 per cent higher at $2.19.

Shanghai’s Covid-19 cases fell for a fourth day as a mass-testing blitz in Beijing continued. As the price of iron ore firmed, Fortescue Metals (ASX:FMG) was a bright spot after it closed 1.7 per cent higher at $20.10, while BHP (ASX:BHP) rose 0.8 per cent to $46.01 and Rio Tinto (ASX:RIO) edged closed 0.2 per cent higher at $108.96 despite a weak start.

Energy stocks made solid gains amid an oil price rebound. Woodside Petroleum (ASX:WPL) closed 1 per cent higher at $30.91 and Santos (ASX:STO) closed 1 per cent higher at $7.88.

At the closing bell, the S&P/ASX 200 was 0.8 per cent or 57 points lower at 7,261.

What else was on watch today?

Production updates were on the cards for Champion Iron (ASX:CIA), with shares up 3.1 per cent to $7.00, Gold Road Resources (ASX:GOR), with shares down 1.6 per cent to $1.54, Iluka Resources (ASX:ILU), with shares up 1.1 per cent to $10.54, and Ramelius Resources (ASX:RMS), with shares up 1 per cent to $1.48. Meanwhile, Downer EDI (ASX:DOW) had its investor day today, while shares closed 4.7 per cent higher at $5.33.

There were quite a few broker upgrades, starting with Morningstar which upgraded its rating for Aristocrat Leisure (ASX:ALL) to a buy from hold, shares closed 1.3 per cent lower at $31.92.

Iluka Resources (ASX:ILU) raised to a hold from sell, with shares up 1.1 per cent to $10.54, while Mineral Resources (ASX:MIN) was upgraded to hold from buy, with shares up 1.3 per cent to $55.40, and Washington H. Soul Pattinson (ASX:SOL), with shares up 0.5 per cent to $26.59 amid an upgrade to a buy from hold.

Morgan Stanley cut Beach Energy (ASX:BPT) to underweight from equal weight. Shares closed 0.3 per cent higher at $1.60.

United Malt (ASX:UMG) received two ratings, one is a cut to hold from Morgan’s, while Credit Suisse raised it to outperform from neutral. Shares closed 2 per cent higher at $4.08.

Company news

Real estate firm Dexus (ASX:DXS) is set to buy AMP’s (ASX:AMP) real estate and infrastructure business from AMP’s subsidiary Collimate Capital. Under the deal, AMP will receive an upfront cash payment of $250 million and is eligible to receive up to another $300 million subject to assets under management over a nine-month period after completion. Dexus says it expects to complete the purchase in the first half of FY23. Shares in Dexus (ASX:DXS) closed 2.3 per cent higher at $11.04, while shares in AMP (ASX:AMP) closed 1.3 per cent lower at $1.02.

Invictus Energy (ASX:IVZ) received three farm-in offers for its 80 per cent owned, Cabora Bassa Project in Zimbabwe, while one of the offers is an updated bid from Cluff Energy Africa. The oil and gas company said ongoing due diligence and internal approvals are being undertaken by additional parties which may result in further bids being received. The company said it will update shareholders accordingly. Shares closed 2.6 per cent lower at $0.19.

PSC Insurance (ASX:PSI) is set to acquire Alan Wilson Insurance Brokers (AWIB) for $17.5 million. The insurance business said AWIB is an insurance broking business based in Traralgon, regional Victoria with specific expertise in the fire protection industry. Shares closed flat at $4.55.

Futures

The Dow Jones futures are pointing to a rise of 220 points.
The S&P 500 futures are pointing to a rise of 19 points.
The Nasdaq futures are pointing to a rise of 34 points.
The SPI futures are pointing to a fall of 53 points when the market next opens.

Best and worst performers

The best-performing sector was Energy, up almost 1 per cent. The worst-performing sector was Information Technology, down 2.4 per cent.

The best-performing stock in the S&P/ASX 200 was Whitehaven Coal (ASX:WHC), closing 5.5 per cent higher at $4.64. It was followed by shares in City Chic Collective (ASX:CCX) and Downer EDI (ASX:DOW).

The worst-performing stock in the S&P/ASX 200 was Life360 (ASX:360), closing 29.4 per cent lower at $3.77. It was followed by shares in Credit Corp Group (ASX:CCP) and PointsBet Holdings (ASX:PBH).

Asian markets

Japan’s Nikkei has lost 1.2 per cent.
Hong Kong’s Hang Seng has gained 0.4 per cent.
China’s Shanghai Composite has gained 2 per cent.

Commodities and the dollar

Gold is trading at US$1898.98 an ounce.
Iron ore is 2.4 per cent higher at US$138.95 a ton.
Iron ore futures are pointing to a rise of 1.4 per cent.
Light crude is trading $0.45 higher at US$102.15 a barrel.
One Australian dollar is buying 71.74 US cents.