Worrying three-week spiral: Aus shares 0.7 per cent lower at noon

Wednesday’s reprieve appears to have been fleeting for ASX investors, with the local sharemarket resuming a worrying three-week spiral.

The benchmark ASX 200 fell by as much as 82.8 points, or 1.2 per cent, in the first hour on Thursday to momentarily dip below the key 7000 level and continue what has been a poor run of form. At noon, the S&P/ASX 200 was 0.7 per cent or 51.30 points lower at 7013.40, with the SPI futures pointing to a fall of 55 points.

The latest US inflation numbers spooked the markets and shredded tech stocks both in the US and Australia, with the tech sector down 6.8 per cent at noon.

Afterpay owner Block Inc (ASX:SQ2) is down more than 15 per cent, while Xero (ASX:XRO) is the next-worst ASX 200 performer, down 12% after it unveiled a loss for the year. Shares in Block fell 15.1 per cent, echoing a decline for the US-listed shares, while Xero shares tumbled 10.9 per cent after the company fell to a loss in the 12 months to the end of March.

The market was also being weighed down by banking stocks, consumer firms such as Woolworths (ASX:WOW), Wesfarmers (ASX:WES) and Coles (ASX:COL), and healthcare names such as CSL  (ASX:CSL) and ResMed (ASX:RMD).

Among the big winners of the session so far were Orica (ASX:ORI), up 6.3 per cent following encouraging half-year results that showed a 25 per cent increase in revenue, and Viva Energy (ASX:VEA), which has increased profits from improved refinery margins.

Cryptocurrencies fared little better amid the fresh market turmoil, while the Aussie dollar remains subdued under 70 US cents.

Mounting inflationary pressures around the world have triggered a steep central bank hiking cycle, something which has dented the appeal of riskier assets such as shares.

Strict Covid-19 lockdowns in China have also cruelled the value of Australia’s resources sector, contributing to a near 9 per cent decline to two-month lows on Tuesday.

Many fear that, with inflation remaining near 40-year highs, the US Fed now has no choice but to deliver a bigger 75 basis-point rate hike, having seemingly taken this option off the table.

Best and worst performers

The best-performing sector is energy, up 0.3 per cent. The worst-performing sector is information technology, down 6.6 per cent.

The best-performing stock in the S&P/ASX 200 is Orica (ASX:ORI), trading 6.3 per cent higher at $16.66. It is followed by shares in PolyNovo (ASX:PNV) and Ampol (ASX:ALD).

The worst-performing stock in the S&P/ASX 200 is Block (ASX:SQ2), trading 15.1 per cent lower at $102.90. It is followed by shares in Xero (ASX:XRO) and Telix Pharmaceuticals (ASX:TLX).

Commodities and the dollar

Gold is trading at US$1858.70 an ounce.
Iron ore is 4.2 per cent higher at US$133.50 a ton.
Iron ore futures are pointing to a rise of 2.54 per cent.
One Australian dollar is buying 69.51 US cents.