Markets foreclosure: Tech, BNPL and lithium players heat up as ASX hits nine-week high

A booming tech sector and strong performance from major banks propelled Australia’s stock market to new highs on Wednesday.

A scorching tech rally and gains for financial giants helped the Australian equity market hit new nine-week highs on Wednesday as investors appeared determined to weather the current geopolitical chaos.

Afterpay owner Block and payment rivals Zip Co each pulled ahead, while tech names Xero, Wisetech Global, Appen, Altium and EML Payments also posted strong gains as the local stock market climbed for the fifth time in six sessions.

The benchmark ASX 200 added another 36.8 points, or 0.5%, to close near a session high of 7377.9 amid a whirlwind of inflation risks, strife in Europe East, soaring oil prices, falling bond prices and a mixed outlook for the United States. economy.

However, traders have taken some comfort in the fact that the US Fed appears to be positioning itself to act “aggressively” on the surge in prices.

The broader All Ordinaries rose 44.3 points, or 0.6%, to close at 7665.0 while the Australian dollar rose from around 75 cents US to 74.55 cents US at the local close.

Other Asian markets were also strong – notably Japan’s Nikkei – after St Louis Fed Chairman Bullard said the US Fed could not wait for geopolitical risks to be resolved before raising rates. of interest.

Rising bond yields also reflect a market that expects more aggressive rate hikes to be launched in order to temper inflation and protect economic growth.

“Rising expectations that the Fed will provide a clear response to the inflationary problem have helped underpin a rally in equity markets,” ANZ’s economics team said in a note.

“But these are challenging times for fixed income markets, as the combination of hawkish central banks, high commodity prices, lingering supply chain issues and growing inflationary pressures are putting strong pressure on the market. the rise in bond yields.

“Rising bond yields are indeed tightening monetary conditions.”

City Index market analyst Tony Sycamore said a strong performance among tech stocks may reflect the looming dividend windfall expected to hit the pockets of investor bankers over the next week.

“BHP alone is due to pay out $10 billion in dividends next Monday,” Sycamore said.

“Based on the current performance of the IT sector, shared dollars seem to be finding a home.”

Fintechs were particularly strong on Wednesday with Block ending up 7.5% at $188.10, Zip Co up 7.5% at $1.645 and Sezzle ahead 5.7% at $1.485.

Accounting software company Xero rose 4.2% to $102.93, Wisetech Global rose 2.1% to $51.87, Appen rose 3.5% to $7.07, Altium gained 3% to $33.57 and EML Payments ended the day up 5.7% to $2.77.

Local banks followed the lead of their US counterparts with another strong session, with Commonwealth Bank continuing its strong recent run with a 1.3% gain to $107.45.

Westpac gained 0.8% to $23.80, while National Australia Bank rose 1.6% to $31.72, ANZ climbed 0.8% to $27.88 and Macquarie Group rose 0.8%. 1.3% to $200.05.

BHP fell 0.8% to $48.44 and Rio Tinto slipped 0.1% to $113.68 to weigh on the market, while falling gold prices sent Newcrest, Northern Star and Evolution.

However, Fortescue Metals managed to defy lower ore prices with a 0.3% rise to $19.

A host of lithium stocks were also strong, with Pilbara Minerals up 3.7% at $3.11, Vulcan Energy up 2.4% at $10.47, Allkem up 4% at $3.11. $10.85 and Liontown Resources up 2.2% to $1.9%.

Energy stocks were mixed despite the rally in oil prices.

Woodside added 0.4% to $32.30, Santos was down 0.3% at $7.77, Beach Energy fell 1.5% to $1.60 and Origin Energy was up 1.2 % at $6.11.

Originally published as Markets foreclosure: Tech, BNPL and lithium players heat up as ASX hits nine-week high