The Australian sharemarket slid lower after the tech sector was hammered by Facebook’s owner delivering a weaker-than-expected fourth quarter earnings report.
The benchmark S&P/ASX200 index dipped 9.7 points or 0.14 per cent to 7078 while the All Ordinaries Index slid 25 points of 0.34 per cent to 7374.6.
OMG chief executive Ivan Tchourilov said the ASX had a choppy day, bouncing around after an early drop, with the information technology sector slumping a massive 5.88 per cent.
“Tech in the US closed ahead, which is generally a good sign for our market,” Mr Tchourilov said.
“However, Meta Platforms’ after-hours earnings report came in below expectations, which has wreaked havoc on today’s session.”
Some of the most brutal hits to the local tech sector were taken by Afterpay acquirer Block, down 9.75 per cent at $145.80, and buy-now-pay-later outfit Zip, down 9.63 per cent at $2.91.
Logistics software provider WiseTech Global tumbled 7.97 per cent to $42.59 and accounting software company Xero dropped 4.97 per cent to $109.64.
“Healthcare, which often moves with tech, was also trading lower,” Mr Tchourilov said.
“From that index, Nanosonics lost 5.08 per cent to $5.05 in a win for stock shorters.”
Westpac improved 2.28 per cent to $21.07 after reporting its December quarter results.
Unaudited cash earnings were up 74 per cent, which Citi said was 7-13 per cent ahead of estimates.
But excluding notable items, cash earnings were just 1 per cent higher.
“It’s margins have worsened, which is partly due to greater competition,” CommSec analyst Steven Daghlian said.
Lower expenses were driven by a more than 1100 reduction in staff and third-party contractors.
ANZ put on 0.67 per cent to $27.07 and National Australia Bank inched four cents higher to $27.91 but Commonwealth Bank gave up 1.37 per cent to $93.44.
Furniture retailer Nick Scali firmed 0.97 per cent to $14.54 after booking a half-year net profit dip, saying it had to close more than half of its store network and suffered production delays, particularly in Vietnam, which was in lockdown for three months.
Mr Daghlian said the shares still rose because profits were up about 75 per cent compared to pre-pandemic.
Agricultural products company Nufarm was a stellar performer, rocketing 20.22 per cent to $5.59 after providing a trading update showing a revenue surge.
This planted high expectations in investors, who bought up the stock with the hope of an even stronger report at the end of the financial year, Mr Tchourilov said.
“Nufarm enjoys record high fertiliser prices while decreasing its leverage to the lowest level in years,” he said.
“Positive free cash flow is fuelling growth strategies in a pivot away from November 2020 lows.”
But Mr Daghlian noted Nufarm had warned of rxjmtzywising costs amid logistics and supply chain problems.
Aristocrat Leisure eased 0.48 per cent to $41.09 after its planned takeover of gambling software group Playtech was scuppered by the British company’s shareholders, with votes in favour falling short of the 75 per cent threshold.
“It wanted to buy that last year basically to help with its expansion in the US online betting market but it didn’t quite get enough backing from the UK investors,” Mr Daghlian said.
Mr Tchourilov said iron ore miners gained steam, with Fortescue Metals and Champion Iron the standouts in recent days.
Fortescue rose 3.28 per cent to $21.13 while Champion added 0.74 per cent to $6.78.
Rio Tinto strengthened 2.43 per cent to $114.14 and BHP lifted 3.09 per cent to $47.05.
Market heavyweight and biotech giant CSL dropped 1.89 per cent to $257.46.
In economic news, Australia’s trade balance decreased by $1.4bn to $8.35bn in December.
“Australia imported a record amount of goods from China and imports in total are up 21.7 per cent, the fastest annual growth rate in 13 years,” CommSec said.
Separately, Wine Australia’s latest export report showed a 30 per cent plunge in value to $2.03bn and a 17 per cent drop in volume to 619 million litres in 2021.
The group blamed that on China’s punitive tariffs on bottled Australian wine, the continuing impact of the global freight crisis and a counter-swing in some markets after Covid-19 related stockpiling in 2020.
The Aussie dollar was fetching 71.27 US cents, 52.56 British pence and 63.04 Euro cents in afternoon trade.
