The Australian share market finished deep in the ‘RED’ on Friday after displaying its worst day since September 9th, following a global selloff after Wall Street’s main indexes tumbled on Thursday, as a rapid rise in bond yields rattled investor sentiment.
At the closing bell, the benchmark S&P/ASX 200 index plunged -160.7 points, or -2.35%, to 6,673.3.
That left the ASX 200 down -1.8% for the week – its worst week in four – after hitting a 12-month high of 6,938.0 points only last week.
Meanwhile, the All Ordinaries dropped -120.4 points, or -2.32%, to 6,940.6.
With all sectors deep in the red, Information Technology was the worst hit after suffering a -5.26% loss, with Discretionary down -3.21%, Health Care fell -2.46%, Telecommunication -2.31%, Materials -2.31%, Financials -2.21%, Staples -1.85%, Real Estate -1.65%, Utilities -1.62%, and Industrials -1.01%.
A wave of selling began in the technology sector, dragging Wall Street lower on Thursday, with all three major U.S. stock index declining rapidly as the 10-year Treasury note marked its biggest one-day advance since November after soaring as high as +1.6% in a sudden move that some described as a “flash” spike.
The yield later settled back down to around 1.52%, its highest level since February 2020.
The advance reflects expectations of higher inflation and higher borrowing costs for companies and individuals.
The five-year yield, which is more sensitive to monetary policy shifts, jumped 0.21 points to 0.82%, the second-largest one day rise seen over the past decade.
Yields added to their advance this week even after Federal Reserve Chair Jerome Powell emphasized the central bank’s commitment to easy policy and downplayed the risk of inflation, saying it could take three years or more before the Fed’s goals are reached.
Investors rushed out of some of the year’s hottest stocks, sending shares of companies like Apple Inc., Alphabet Inc. and Netflix Inc. down more than -2% apiece, while Tesla Inc. shares fell more than -8%.
Buy now, pay later Afterpay plummeted -11.4%, to $119.52, a fall not witnessed since the depths of the coronavirus rout last March.
Meanwhile, Xero lost -1.1%, to $118.43, WiseTech Global declined -1.87%, to $27.27 and Zip Co Ltd dropped -5.02%, to $10.40.
Kogan.com, meanwhile, plunged -10.38%, even after net profit more than doubled to $23.6 million while revenue jumped 89% to $414 million. KGN also increased its interim dividend to 16 cents per share.
Harvey Norman reported a net profit more than doubled to $462 million on a 25% lift in total aggregated sales of $5.1 billion.
As sales for furniture, electrical and whitegoods sales remained strong during the pandemic.
Harvey Norman also raised its dividend to 20 cents per share, with its shares ended down -1.13%, to $5.24.
Miners reversed some of this week’s gains with Fortescue Metals Group leading the titans lower after ending down -4.48%, to $24.11, BHP Group lost -2.62%, to $49.13, while Rio Tinto dropped -1.31%, to $127.19, South32 slid -3.15%, to $2.77 and Mineral Resources declined -4.63%, to settle at $37.92.
Gold resources were firmer, with Northern Star added +1.59%, to $10.21, and Evolution rose +1.2%, to $4.20, while Newcrest Mining slipped -0.16%, to $24.64.
Travel stocks were weaker with Webjet falling -3.31%, to $5.55, with Flight Centre dropping -6.63%, to $16.61, Qantas declined -1.96%, to $4.82, Regional Express, meanwhile, slipped -3.68%, to $1.70 and Corporate Travel Management fell -3.43%, to $20.27.
Healthcare was weaker, with Biotechnology giant CSL plunged -2.83%, to $262.59, while ResMed lost -2%, to $24.55, Cochlear fell -1.53%, to $211.41, Ramsay Health slid -3.2%, to $66.00 and Mesoblast ended flat at $2.46.
Wesfarmers finished -2.36%, lower to $49.24, while Woolworths saw its share price end the trading session weaker -1.7%, to $39.40 while its rival Coles Group lost -4.31%, to $15.33.
The Financials sector were deep in negative territory, with Commonwealth Bank leading the “Fab Four” banks lower, after falling -2.56%, to $81.56, Australia and New Zealand Banking Group slipped -2.24%, to $26.17, Westpac Banking Corp dropped -2.22%, to $23.82, while National Australia Bank fell -2.03%, to $24.64, and Macquarie Group lost -1.95% and settled at $142.48.
Meanwhile, our local currency, the Australian dollar, is currently buying US$0.7752 (as of writing).