Tech shares plunge, Afterpay exits ASX

Steven DeareAAP
Selling on Wall Street overnight has filtered into the ASX, which was lower.
Camera IconSelling on Wall Street overnight has filtered into the ASX, which was lower. Credit: AAP

Technology shares have plunged and the incredible story of Afterpay stock came to an end as ASX investors suffered broad losses.

A 2.56 per cent drop for technology shares made them the worst performers amid a market decline of about one per cent on Wednesday.

Producers of batteries for electric cars had their shares cheapened particularly.

Novonix, which recently announced plans to list on the Nasdaq, fell 9.7 per cent to $9.22.

Allkem, the product of the merger between Galaxy Resources and Orocobre, dived 6.89 per cent to $10.81.

The US Nasdaq dropped about two and a half per cent last night as bond yields soared on rising rate expectations.

ThinkMarkets analyst Carl Capolingua said the electric car stocks did well last year.

"The pullback today sounds bad but they have had a great run," he said.

Meanwhile Afterpay shares have traded for the final time on the ASX as the company merges with US payments giant Block.

The payments provider founded by Australians Nick Molnar and Anthony Eisen sold shares in its initial public offering in 2017 for $2.50.

Last year they rose to a record $160.05 as online buying surged during the pandemic.

In their last trading day, the shares fell 2.18 per cent to $66.47.

Outside of technology, shares in healthcare, materials, financials and telecommunications each lost a little more than one per cent.

Bond yields climbed in Australia and abroad as investors prepare for higher interest rates, particularly in the US.

The US central bank wants to slow inflation and has a meeting next week. However, most expect the first rate rises in March.

Mr Capolingua said investors were demanding better returns from fixed interest investments like bonds given rates were tipped to rise.

"Investors are raising cash levels and decreasing risk. They are holding cash," he said.

The benchmark S&P/ASX200 index closed down 76.3 points, or 1.03 per cent, to 7332.5 points.

The All Ordinaries index closed lower by 79.2 points, or 1.02 per cent, to 7656.6 points.

In company news, BHP improved iron ore exports in the December quarter but warned of coronavirus challenges once Western Australia relaxes rules on visitors from February 5.

The miners exported 73.2 million tonnes of iron ore in the quarter, more than the 70.7 million tonnes in the same period the year prior.

BHP was down 0.3 per cent to $46.56.

Among chief rivals, Fortescue fell about one-and-a-half per cent to $20.44. Rio Tinto was better by 0.24 per cent to $109.91.

Financial shares had a poor lead from the US where Goldman Sachs missed quarterly profit expectations.

Australia's big bank shares were lower. The Commonwealth fared worst of the big four and shed 1.45 per cent to $99.33. Macquarie shed 3.71 per cent to $199.19.

Networking provider Megaport plunged 16.15 per cent to $15.32 after investors were unconvinced by its December quarter performance.

CIMIC group won a NSW government tunnelling contract as part of a joint venture.

CIMIC subsidiary CPB Contractors and John Holland will dig the Western Harbour Tunnel in Sydney.

CPB will reap about $350 million in revenue.

CIMIC was down 1.15 per cent to $17.12.

The Australian dollar was buying 71.94 US cents at 1724 AEDT, higher from 71.91 US cents at Tuesday's close.

ON THE ASX

* The benchmark S&P/ASX200 index closed down 76.3 points, or 1.03 per cent, to 7332.5 points.

* The All Ordinaries index closed lower by 79.2 points, or 1.02 per cent, to 7656.6 points.

* At 1724 AEDT, the SPI200 futures index was up 11 points, or 0.15 per cent, at 7236 points.

CURRENCY SNAPSHOT

One Australian dollar buys:

* 71.94 US cents, from 71.91 cents on Tuesday

* 82.22 Japanese yen, from 82.65 yen

* 63.49 Euro cents, from 63.15 cents

* 52.87 British pence, from 52.77 pence

* 105.96 NZ cents, from 106.18 cents.

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