The threat of steeper-than-expected interest rate hikes both home and abroad again spooked investors, leaving the local technology sector battered and bruised.
The benchmark ASX 200 dropped another 47.3 points, or 0.6 per cent, to 7442.8 on Thursday in a third session overshadowed by the prospect of tighter monetary policy.
The broader All Ordinaries fell 53.5 points or 0.7 per cent to 7734.8, while the Australian dollar eased from 75.80 US cents to 74.89 US cents at the local close.
High-growth tech names such as Block Inc, Wisetech Global, Xero, Altium, Appen, Novonix and Zip Co were savaged in the market’s second straight loss, while there was little joy among the major banks and miners.
Gains for blue-chips such as Woolworths, Coles, Telstra, Resmed and Transurban helped cushion the blow somewhat but not enough to stop losses accelerating from Wednesday.
City Index analyst Tony Sycamore said the local market’s brave run at all-time highs appeared “increasingly tenuous”, with investors struggling to digest the RBA’s hawkish pivot earlier this week, as well as minutes from the March US Fed meeting which indicate steeper rate hikes could be in play.
Also likely paying on investors’ minds was China’s Covid-19 surge, suggesting “the genie had well and truly escaped the bottle, despite strict lockdowns in Shanghai sparking concerns over supply chains and the outlook for commodities”.
“Rising yields and souring risk sentiment sparked anxjmtzywother round of falls in local IT stocks,” Mr Sycamore said.
“Fears that higher interest rates will eat into household budgets have weighed on consumer facing stocks … (while) the Big Banks, which typically do well in April as investors chase them ahead of their chunky dividend payments in May, are trading lower.”
Wall Street had tumbled overnight on the release of minutes from the latest US Fed meeting, which suggested the central bank’s balance sheet run-off is to be accelerated, and sharper rate hikes factored in to the tightening cycle.
Mr Sycamore noted the US interest rate market is pricing 225 points of rate hikes on top of the 25bp hike already signed, sealed and delivered in March, which he said would be the fastest rate of tightening since the 1994 cycle that up-ended stock markets.
As is usually the case, high-growth equities felt the brunt of the selling amid rate jitters.
Tesla, Apple and Amazon all dropped heavily as the tech-heavy Nasdaq fell more than 2 per cent.
Local tech and payment names followed suit, with Block Inc dropping 4.3 per cent to $170.68, Zip Co falling 1.4 per cent to $1.46, Sezzle 3 per cent lower at $1.30 and Tyro Payments shedding 2.1 per cent to $1.63.
Xero was down 2.9 per cent to $101.81, Wisetech Global 6.7 per cent lower at $49.25, Novonix shed 6.4 per cent to $6.33, Appen was down 2.3 per cent to $6.67, and Altium fell 3.8 per cent to $33.38.
Among the miners, BHP lost 0.7 per cent to $51.07 and Rio Tinto slipped 0.1 per cent to $118.74, while lithium names also lost a bit of heat.
Mineral Resources was 0.6 per cent lower at $60.01, Vulcan Energy dropped 5.8 per cent to $9.51, Pilbara Minerals dropped 3.6 per cent to $3.23 and Allkem was 1.8 per cent lower at $12.81.
Fortescue Metals bucked the materials trend with a 0.4 per cent rise to $21.75.
The Big Four banks – Commonwealth, Westpac, NAB, and ANZ – each lost between 0.1 and 0.5 per cent, while fund managers Pinnacle, Pendal, Challenger, Janus Henderson and Perpetual were also lower.
Magellan was a standout, however, gaining 11.4 per cent to $17.23 on signs its recent outflows have slowed.
Woolies rose 0.6 per cent to $37.55, Coles gained 0.9 per cent to $18.18, Resmed 2.4 per cent to $32.81, Telstra 0.8 per cent to $3.96 and Transurban 0.9 per cent to $13.50.
