ASX Close: Markets plunge as Russia attacks Ukraine

The share market tumbled 3 per cent to its heaviest loss of the year after Russian troops attacked Ukraine.

Oil and gold spiked after explosions were reported in major Ukrainian cities, including the capital, Kiev. Dow futures slumped 620 points or 1.9 per cent.

The S&P/ASX 200 fell 215 points or 2.99 per cent to its lowest close in more than three weeks.

Gold miners and takeover target CIMIC were among a handful of stocks to avoid the carnage. Former tech favourites Appen and Life360 lost more than a quarter of their value after disappointing trading updates.

What moved the market

Financial markets around the world shuddered after Russian President Vladimir Putin announced a “special military operation” in Ukraine. Putin said the operation was necessary to protect Russia.

Explosions were reported in several Ukrainian cities shortly after. The Ukrainian Interior Ministry reported hundreds of casualties.

Ukraine’s Foreign Minister, Dmytro Kuleba, said, “Putin has just launched a full-scale invasion of Ukraine. Peaceful Ukrainian cities are under strikes.”  

NATO condemned the attack as “reckless”. US President Joe Biden said Russia had chosen “premeditated war” and would be held accountable.

“Russia alone is responsible for the death and destruction this attack will bring, and the United States and its Allies and partners will respond in a united and decisive way. The world will hold Russia accountable,” Biden said.

Oil jumped above US$100 a barrel. Brent crude for April delivery traded as high as US$102.08 before paring its advance to $4.20 or 4.3 per cent at US$101.04.

Gold, a traditional haven, jumped to its highest in more than a year. The yellow metal was last up US$25.50 or 1.4 per cent at US$1,937 an ounce after rising as high as US$1,951.

Wheat traded limit up in Chicago. Corn jumped almost 5 per cent. Bitcoin dived 6.7 per cent. Other popular cryptocurrencies fell 7-9 per cent. Bonds rallied, sending yields lower.

The Australian dollar dropped 0.35 per cent to 72.02 US cents as traders retreated to the perceived security of the greenback.

S&P 500 futures declined 1.84 per cent. European markets were set to open between 2.3 and 3.8 per cent lower, according to futures action.

The ASX was under selling pressure all session and hit its low after Putin authorised the military operation. Today’s close was the first under 7000 since January 31.

The Dow Jones Industrial Average crumbled 465 points or 1.38 per cent overnight to finish within a few points of joining the S&P 500 in a technical correction. (A correction is defined as a close at least 10 per cent below a previous peak.) The Nasdaq Composite skidded 2.57 per cent to extend its decline from last year’s peak to 18.8 per cent.

Winners’ circle

Construction firm CIMIC soared 33.41 per cent to $22 after majority shareholder Hochtief offered to buy any shares it does not own at that price. The German giant’s Australian subsidiary owns more than 78 per cent of CIMIC.    

Gold miners provided the day’s other top performers. Perseus jumped 12.26 per cent, Northern Star 5.9 per cent, Evolution Mining 4.77 per cent and Newcrest 4.02 per cent.

Nine Entertainment rose 1.11 per cent after increasing profit by 20 per cent last year to $213 million. Profits were boosted by record television revenues and strong growth at the media group’s Stan Sport streaming platform.

Record underlying half-year earnings lifted Qube Holdings 0.36 per cent. The logistics provider increased its interim dividend by 20 per cent to 3 cents fully franked after raising revenues by 26.7 per cent.

NextDC bucked a stiff downtrend in tech, rising 3.43 per cent after a record first half prompted an earnings upgrade. The data centre provider lifted its full-year underlying earnings forecast to $163-$167 million from previous guidance to $160-$165 million.

Lovisa soared 11.78 per cent on news revenues grew 48.3 per cent through the first half as the fashion retailer opened new stores. Gross profits increased by 50.5 per cent to $170.7 million.

Ramsay Health Care inched up 0.15 per cent after CEO and Managing Director Craig McNally said the group was well placed to benefit from a backlog of surgical procedures. Lockdowns, restrictions on surgery and increased operating costs knocked half-year profits down 29.7 per cent.

Among other companies reporting today, Service Stream rallied 7.55 per cent. Resolute Mining finished flat.

Perpetual shed 1.2 per cent, Blackmores 9.18 per cent, Telix Pharmaceuticals 4.54 per cent, Airtasker 10.6 per cent, Insignia Financial 1.04 per cent, Cromwell Property Group 1.12 per cent, TPG Telecom 2.73 per cent, Atlas Arteria 3.02 per cent, Bega Cheese 7.37 per cent, Slater & Gordon 16.42 per cent, Southern Cross Media 12.07 per cent and Iluka Resources 3.91 per cent   

Doghouse

A tough earnings season for the tech sector continued with heavy punishment meted out today to Appen and Life360.

Machine learning specialist Appen dived 28.7 per cent to a four-year low on news profits fell 20 per cent last year.

Mobile app maker Life360 tanked 28.77 per cent as increased spending saw its full-year loss double to US$15.3 million despite increased revenues.

The declines helped drive the I.T. sector down 6.4 per cent to its lowest since June 2020. Afterpay parent company Block slid 12.91 per cent after the Nasdaq Composite lurched closer to a bear market overnight.

Novonix dropped 9.06 per cent, Codan 7.89 per cent and EML Payments 7.84 per cent. Link Administration dipped 0.57 per cent after reporting.

Travel stocks were under the pump following overnight declines in US airlines, cruise companies and hotels.

Flight Centre dropped 10.13 per cent after another half-year loss. A 98.1 per cent increase in revenues helped reduce the travel agent’s H121 loss to $194.2 million.

Qantas dipped 5.05 per cent after a 31.9 per cent improvement in revenues helped the airline more than half its half-year loss to $456 million.

A record full-year profit could not shield Rio Tinto from the cold market winds. The iron ore miner eased 3.77 per cent after warning production costs will increase this year.

The scale of today’s retreat was exaggerated by a 6.92 per cent decline in index heavyweight BHP as its shares traded without a fat dividend. The miner accounts for 11 per cent of the total value of the index.

Other markets

Asian markets suffered heavy falls. The Asia Dow slid 2.41 per cent, China’s Shanghai Composite 0.89 per cent, Hong Kong’s Hang Seng 3.11 per cent and Japan’s Nikkei 2.3 per cent.