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The share market logged its weakest close since January as the tech sector slumped to a two-year low and the dollar fell below 69 US cents.

Borrowing-dependent growth stocks bore the brunt as the S&P/ASX 200 tumbled 124 points or 1.75 per cent. The fall was the index’s fourth in five sessions.

The benchmark closed below 7000 for the first time since March after a brief mid-morning recovery faltered.

What moved the market

A week-long sell-off took an ominous turn as index finished under the psychologically-significant 7000 level.

As in prior sessions, dip-buyers entered the market when the milestone fell in the opening hour. Unlike the last two days, they were unable to turn the crimson tide.

The index ended at 6941, the second-lowest close of a volatile year. Today’s fall extended the decline since last Friday beyond 400 points or 5.75 per cent.

Wall Street appeared to move a step closer to capitulation overnight after hopes for a solid decline in inflation were dashed. April data showed growth in consumer prices cooled, but not by as much as economists expected.

“The stronger than expected US inflation print provides further ammunition to hawks within the [Federal Reserve] calling for a faster pace of policy tightening alongside the need to take the Fed funds rate above neutral,” NAB currency strategist Rodrigo Catril said.

“The Fed meets again on June 15 and a 50bps Fed funds rate hike looks like a done deal with a 25bps hike definitely no longer a consideration, that said the May CPI print is released on June 10, and if we get another “shocker”, then a 75bps hikes becomes a strong possibility.”

The Dow fell 1.02 per cent to a fifth straight loss. The S&P 500 dropped 1.65 per cent, extending its retreat from record levels beyond 18 per cent. The Nasdaq Composite slipped deeper into bear market territory with a fall of 3.18 per cent.

Tech stocks spearheaded US losses, setting up the Australian sector for a horror session. The S&P/ASX Information Technology Index crashed 8.7 per cent to its lowest since May 2020.

The sector has given up all of its pandemic-era gains, plus more. Today’s close was more than 16 per cent below the pre-lockdown peak in February 2020.

The dollar was caught up in the increasingly bearish market mood, falling 0.7 per cent in afternoon trade to 68.77 US cents.

Heavy falls on cryptocurrency markets added to market worries. Bitcoin fell almost 5 per cent to its lowest since 2020. Ethereum slumped more than 10 per cent, Litecoin 12.4 per cent and Monero 13 per cent.

Winners’ circle

Just 13 of the ASX 200’s component companies finished higher.  

Commonwealth Bank climbed 0.63 per cent after reporting a net profit of $2.3 billion in the first quarter. Expenses declined 2 per cent. A 3 per cent increase in volumes was offset by a 1 per cent dip in income due to margin pressure.

Orica rallied 4.66 per cent as first-half underlying earnings improved 58 per cent. The explosives firm reported a statutory net loss of $85 million, due to significant items. Underlying earnings per share increased by 94 per cent to 36.1 cents.

News of a 44 per cent bump in first-quarter earnings lifted Ampol 1.47 per cent. CEO Matt Halliday told today’s AGM that refining margins had improved 93 per cent over Q121.

Viva Energy also reported strengthening refinery margins. The actual refining margin more than doubled last month to US$26.40 per barrel from the March margin. The share price faded to a loss of 0.37 per cent.

AGL Energy firmed 1.71 per cent as traders looked for havens from the selling. Amcor gained 1.23 per cent, HomeCo Daily Needs 1.19 per cent and NAB 0.95 per cent.

Director share purchases spurred Polynovo to a gain of 1.33 per cent.  


The unhappy downhill ride for tech investors continued with double-digit declines in several market-leaders.

The Australian listing of Afterpay’s US parent Block dived 17.61 per cent to its lowest point since the takeover, surpassing a 15.6 per cent fall in the US overnight. The US listing closed at a 52-week low.

A full-year loss from Xero did little to improve the mood. The accounting software giant reported a net loss of $9.1 million as an increase in operating expenses overshadowed a modest rise in earnings. The share price slumped 11.58 per cent.

Altium slid 16.69 per cent, Life360 12.03 per cent and Telix Pharmaceuticals 11.03 per cent.

News that half of Shanghai was Covid-free fuelled a rebound in commodity prices overnight. Iron ore bounced 5.3 per cent, Brent crude 4.9 per cent and copper 1.3 per cent.

That put a floor under the major miners and energy producers. Fortescue Metals eased 2.76 per cent, BHP 1.55 per cent and Rio Tinto 2.09 per cent. Santos shed 2.13 per cent and Woodside Petroleum 3.05 per cent.

CSR skidded 9.62 per cent as brokers downgraded their outlooks in the wake of yesterday’s full-year earnings result.

CSL dipped 1.82 per cent on news of a delay in its acquisition of Swiss giant Vifor Pharma. The company said the regulatory approval process would take “a few more months”, but it remained confident of completing the acquisition.

Other markets

Asian markets deteriorated as the session wore on. The Asia Dow shed 1.74 per cent, Hong Kong’s Hang Seng 2.19 per cent, Japan’s Nikkei 1.67 per cent and China’s Shanghai Composite 0.83 per cent,

US futures reversed early gains in afternoon trade. S&P 500 futures sank 16.5 points or 0.42 per cent.

Gold turned lower as the US dollar rallied. The yellow metal dropped US$4.70 or 0.25 per cent to US$1,849 an ounce.

Brent crude retreated US$1.51 or 1.4 per cent to US$106 a barrel.

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