ASX in the red after falls in the US

THE Australian sharemarket slid into the red for the second straight day on the back of a resoundingly negative lead from Wall Street, including the tech-heavy Nasdaq index tumbling by 2.6 per cent to its lowest level in three months.

The benchmark S&P/ ASX200 index closed 1.03 per cent lower at 7332.5, while the All Ordinaries Index dropped 1.02 per cent to 7656.6.

Commsec analyst Steven Daghlian said markets overnight banked on the US Federal Reserve hiking rates faster than expected in coming months in response to inflation rising at the quickest pace in about 40 years.

“We’ve seen the bond market moving in anticipation of these rate hikes; the benchmark 10-year bond yield in the US actually rising to the highest levels in about two years,” Mr Daghlian said.

OMG chief executive Ivan Tchourilov said rate hikes would put downward pressure on equity valuations and increase the risk of holding those with lower cash flows and profitability.

Accordingly, tech stocks were also the worst performing sector here, with Megaport leading the declines.

Despite providing a trading update showing 8 per cent revenue growth over the December quarter, the company plunged 16.15 per cent to $15.32.

Brainchip bucked the trend, surging 14.52 per cent to $2.13, after announcing it had been granted a new US patent.

Pilbara Minerals dropped 3.89 per cent to $3.71, Allkem slumped 6.89 per cent to $10.81 and Chalice Mining backtracked 3.3 per cent to $8.18.

Rio Tinto added 0.24 per cent to $109.91 despite UBS slapping a sell rating and an $80 share price target on the miner in the wake of its fourth quarter production results on Tuesday.

UBS said the report was slightly weaker than expected, with Rio’s 2022 guidance for Pilbara iron ore shipments, aluminium and mined copper below consensus.

It also said the iron ore price risk was skewed to the downside over the next 12 months after recent strength.