Join our daily newsletter At The Bell to receive exclusive market insights
A resilient ASX weathered the worst of a tech storm on Wall Street after Facebook suffered the biggest wipe-out in US market history.
The S&P/ASX 200 faded late morning to a mid-session loss of 18 points or 0.25 per cent after earlier bucking strongly negative leads.
ASX tech stocks held their ground as upbeat after-hours earnings updates from Amazon, Snap and Pinterest bolstered confidence yesterday’s Facebook result was an outlier. US futures recovered this morning.
What’s driving the market
In a reverse image of yesterday’s action, negative US leads were superseded this morning by a sharp rebound in US equity futures. Jittery futures markets stabilised in the wake of after-hours rallies in Amazon, Snap and Pinterest.
S&P 500 futures bounced 43 points or 0.96 per cent. Nasdaq futures gained 251 points or 1.73 per cent.
Amazon shares popped 14.26 per cent in extended trade after paper profits from its investment in electric truck maker Rivian overshadowed weaker-than-expected sales and downbeat guidance.
This year’s extreme market volatility was underlined by a 59.18 per cent after-hours jump in Snap after the Snapchat owner posted its first ever profitable quarter as a public company. The social media giant earlier dived 23.57 per cent during regular trade. Pinterest jumped 20.97 per cent this morning in extended trade.
The recovery in US futures offered the ASX a safety net after a brutal night session in the US. The Nasdaq Composite crumpled 3.74 per cent to its heaviest loss in more than a year as Facebook owner Meta Platforms lost a quarter of its value. The S&P 500 fell 2.44 per cent.
“Meta observed the biggest one-day loss in the history of an American company as it projected revenue well below analysts’ expectations for the ongoing quarter,” Kalkine Group CEO Kunal Sawhney said.
“It will be interesting to watch if the high-value tech stocks will be able to justify their steep valuations in 2022 amidst anticipations of an interest rate hike,” he added.
The battered Australian tech sector held its ground after pre-empting last night’s Nasdaq weakness with a plunge of 5.88 per cent yesterday. Megaport bounced 1 per cent, Appen 0.8 per cent and Life360 0.62 per cent. Fintechs Block and Zip Co gained 0.81 and 0.34 per cent, respectively.
Going up
A 13 per cent jump in quarterly revenue lifted Rupert Murdoch’s News Corp 3.99 per cent to a three-month high. Earnings were boosted by growth in digital traffic, the most profitable quarter to date at Dow Jones and increased subscriptions for the Binge and Kayo streaming platforms.
“For the first half of fiscal year 2022, News Corp’s profitability reached nearly $1 billion, up 30% year-over-year, with the second quarter delivering record revenues and the highest profit of any quarter since the company was formed in 2013,” Chief Executive Robert Thomson said.
The media giant’s majority-owned property advertising spin-off REA Group edged down 1.4 per cent. The company increased revenues over the first half by 37 per cent to $590 million. The rise allowed the firm to raise its interim dividend payment by 27 per cent to a record 75 cents per share.
Westpac was the pick of the major banks for a second day, rising 1.33 per cent following a well-received trading update yesterday. Several brokers this morning upgraded their outlooks on the bank.
Macquarie Group rose 0.94 per cent. CBA dropped 0.35 per cent, ANZ 1.33 per cent and NAB 1.22 per cent.
Other heavyweights to advance included Transurban +0.51 per cent, Brambles +0.64 per cent, Woolworths +0.29 per cent and Coles +0.18 per cent.
A contract win in New Zealand helped Downer EDI lift 0.55 per cent. The firm will provide field services to telecom Chorus for three years from April 1.
AMP was flat as it neared its exit from the New Zealand Stock Exchange. The wealth manager will delist from the NZX at close of business today. The firm’s New Zealand shares will automatically transfer to the ASX.
At the junior end of the market, Carnaby Resources surged 34.19 per cent to a record high after reporting a “major copper gold discovery” at its Nil Desperandum Project at Mount Isa.
Frontier Resources rallied 16 per cent on news David Frances will join as Non-Executive Chair, replacing Alec Pismiris. Mr Frances has a 30-year track record in mining in Australia and Africa.
Going down
The major miners trimmed two days of gains following overnight weakness in industrial metals. BHP eased 1.34 per cent, Rio Tinto 0.59 per cent and Fortescue Metals 0.37 per cent.
The morning’s worst performers were auto parts provider ARB Corporation -5.46 per cent, construction materials firm Adbri -4.85 per cent and mineral sands miner Iluka Resources -3.58 per cent.
Asset manager Janus Henderson dipped 1.28 per cent after reporting a decline in fourth-quarter income. Operating income contracted to US$157.6 million in Q4 from US$248.3 million the previous quarter.
Other markets
Hong Kong’s Hang Seng jumped 1.89 per cent as trade resumed after the Lunar New Year break. The Asia Dow edged up 0.05 per cent. Japan’s Nikkei dipped 0.12 per cent. Trade on the Chinese mainland remained suspended for Golden Week.
Oil extended overnight gains. Brent crude climbed 44 US cents or 0.5 per cent to US$91.55 a barrel.
Gold bounced US$3.40 or 0.2 per cent to US$1,807.50 an ounce.
The dollar firmed 0.02 per cent to 71.43 US cents.
