ASX investors fell early on Monday after a sharp sell-off on Wall Street sent tech stocks tumbling.
Tech groups and real estate trusts were trashed on Monday as ASX traders took inspiration from the Wall Street tumble that ended over the weekend and braced for interest rate hikes on both sides of the Pacific .
The benchmark S&P/ASX 200 fell 1.8% early on as traders dumped shares of Xero, Wisetech Global, Block Inc, Appen, EML Payments and Altium, reflecting a selloff from the Nasdaq focused on the growth on Friday.
The local index managed to pare its losses in the afternoon but still ended the day down 88 points, or 1.2%, at 7347.0, with all sectors in the red.
The broader All Ordinaries fell 101.2 points, or 1.3%, to settle at 7623.6, while the Australian dollar slumped to 70.47 US cents at the local close.
ASX investors backed off from the opening bell after U.S. stocks plunged on Friday in anticipation of a 50 basis point rate hike from the U.S. Fed in days.
Shares of Amazon were particularly battered after a series of disappointing financial results, while weak prospects for Apple and Facebook prompted the tech sector to sell more beyond the usual hit to growth stocks when monetary policy is tightened.
Though it’s no doubt also sweating Covid lockdowns in China and the war in Ukraine, the Reserve Bank of Australia, which on Tuesday is widely expected to accelerate its monetary adjustment plans and make its first interest rate hike interest, more immediately worries local traders. in 12 years.
Governor Philip Lowe has almost every chance of pulling the trigger and raising rates by 15 basis points to 0.25% to help the economy get a grip on runaway consumer prices.
Betashares ETF Senior Economist David Bassanese is among the myriad of market watchers who believe last week’s scorching CPI print essentially made the RBA’s decision, though he has said there were a few unknowns left.
“(It) makes that call easier – although it remains to be seen whether the RBA will hesitate any longer, either because of election sensitivity or because it really wants to wait for confirmation of accelerating wage inflation before to act,” said Mr. Bassanese.
“In my view, if the RBA raises rates tomorrow it should and probably will only be 15bps – there is no need to shock the economy with a 40bps move from the get-go. .”
Whether it was Wall Street’s weak lead – or the prospect of an emergency rate hike – there was little joy to be had in the local stock market.
As expected, tech stocks were crushed, with Block Inc down 2.2% to $142, Xero down 6.6% to $90, Wisetech Global down 7.3% to $41.97 and Appen down 4.5% to $6.36.
Altium fell 4.4% to $31.43, EML Payments fell 3.8% to $1.54, Tyro Payments lost 5.6% to $1.185 and Megaport lost 5.5% to 8 $.20.
Healthcare stocks fared little better, with CSL down 1% at $270.45, Sonic Healthcare down 1.9% at $36.02, Cochlear down 2.2% at 226 $.57 and Resmed down 1.4% to $28.73.
Property trusts were also badly hit ahead of the upcoming RBA meeting.
Storage and warehousing company Goodman Group fell 7.2% to $22.26 and National Storage fell 2.3% to $2.55, while office owners Dexus, GPT and Charter Hall were also beaten.
There was a 2.7% decline for mall owner Scentre Group to $2.91, a 1.7% loss for Mirvac to $2.38, a 2.1% decline for Vicinity Centers at $1.835 and a 1.4% decline for Stockland at $4.10.
Weak activity data from China released over the weekend due to Covid lockdowns sent most mining stocks tumbling, although Rio Tinto managed a 0.7% gain to $113.59.
Travel stocks also proved to be one of the few bright spots in the market after Qantas announced it was close to returning to profitability while issuing a new message of confidence with a $7 billion order from new domestic and international aircraft.
Shares of the national carrier ended up 2.9% at $5.76 and led travel broker Flight Center up 1.8% at $22.99, Helloworld up 2.6% at $2.73 and Webjet up 1.2% to $6.10.
Originally published as Markets close: ASX tech stocks tumble as traders brace for RBA interest rate hike