Mining and tech stocks sink ASX

Market’s worst day since Feb

HEAVY losses in the mining and tech sectors dragged the Australian sharemarket down to end the week on its worst day in two months.

After nearing record highs earlier in the week, the benchmark ASX 200 suffered losses throughout the day on Friday, to finish the session 1.6 per cent lower at 7473.3 points, a decrease not seen since February.

The broader All Ordinaries suffered a 1.5 per cent fall to finish at 7768.2 points, while the Australian dollar also dipped and was trading just above US73c on Friday.

The local market tumbled following a bad session on all three major Wall Street indices overnight on Thursday, prompted by a hawkish outlook from the US Federal Reserve.

Tech stocks on the Nasdaq and the Australian index were bloodied for another day after investors started to factor in the likelihood of interest rate hikes.

OANDA Asia-Pacific analyst Jeffrey Halley said the sour mood could be traced to comments made by the US central bank’s chairman, Jerome Powell, who signalled a 0.5 per cent rise in May and said he was open to “frontloading” more similarly sharp rate hikes.

“Mr Powell cited a tight labour market and inflation at multi-decade highs. Fellow president Mary Daly also suggested 0.5 per cent hikes, while the bull in the monetary China shop, James Bullard, reiterated his enthusiasm for 0.75 per cent hikes,” Mr Halley said.

Looming rate rises were the nail in the coffin for tech stocks on Friday after a dismal run that began amid a dramatic fall in Netflix shares on Wednesday.

The local IT sector fell by 2.5 per cent, with Afterpay owner Block suffering a 6.5 per cent drop to $146, buy now, pay later operator Zip Co sliding 4.4 per cent to $1.10 and batteries player Novonix falling by 5.5 per cent to $5.55.

Data centre connectivity group Megaport was the local index’s worst performer for a second day, closing down 9.7 per cent lower at $9.04.

The resources sector was caught up in a wave of sell offs despite a mixed day for commodity prices.

It was a bad day for the mining giants as BHP sunk by 4.4 per cent to $48.49, Rio Tinto dropped 2.4 per cent to $113.60 and Fortescue Metals lost 1.2 per cent to $21.22.

The big banks also retreated after a positive session on Thursday, with CBA down by 2.8 per cent to $105.37, Westpac falling by 1.2 per cent to $24.21, NAB dropping by 1.37 per cent to $33.14, ANZ retreating by 0.8 per cent to $27.78 and Macquarie dropping 1.6 per cent to $207.60.

Health care was the only one of 11 local sectors to finish the day with modest gains, led by private hospital giant Ramsay, which was up 1.7 per cent to $84.4 and CSL, up 1.4 per cent to $270.9.

Shares in hospitality and drinks retailer Endeavour shrugged off the slump found elsewhere to lead the index with a 1.7 per cent gain to $7.74. Telstra also closed in the black, rising 1c to $4.05.