Markets wrap: ASX finishes higher despite ongoing tech sector slump

Alex DruceNCA NewsWire
Not Supplied
Camera IconNot Supplied Credit: News Corp Australia

The Australian sharemarket bounced back on Wednesday, even as the threat of rising interest rates and inflationary pressures again roiled technology stocks.

The banking sector and gold miners were strong and there were solid gains for consumer-focused companies such as Woolworths, Coles, Wesfarmers and Metcash as the ASX 200 climbed 26.4 points, or 0.4 per cent, to finish at 7155.2.

It was the local market’s best session of the week so far and came despite lingering concerns around future rate hikes, as well as the general outlook for global growth.

The broader All Ordinaries also rose, adding 18.5 points or 0.3 per cent to 7391.7, while the Aussie dollar remained near 71 US cents.

Camera IconA rally in US equity futures helped drag the local market to a positive close. NCA NewsWire / Jeremy Piper Credit: News Corp Australia

Wednesday’s gains came despite another heavy technology sector sell-off, triggered again by a poor trading update from social media firm Snap.

Afterpay owner Block Inc joined Wisetech Global, Xero, Appen, Megaport, Zip Co and Computershare in the doldrums after the parent companies of Google and Facebook were similarly roasted on the tech-heavy Nasdaq overnight.

Block fell another 5.5 per cent to $109.25, Xero dropped 1.1 per cent to $87.47, Wisetech was 3.2 per cent lower at $39.86 and Appen fell 4.6 per cent to $6.40.

That said, a rally in US equity futures helped drag the local market to a positive close after soft economic data ignited hopes the US Fed will not need to be as aggressive with its rate hiking cycle.

IG Markets analyst Hebe Chen said fleeting swings in US sentiment lately had seemingly induced traders to take a short-term perspective without bearing longer-term risk.

“As such, we have seen some similar patterns in the ASX … that most of the early gains were muted towards the close of the session alongside relatively low trading volumes,” she said.

Gold companies improved as nervy investors turned to the yellow metal and government bonds for a safe haven from the economic turmoil echoing around the world.

Newcrest rose 0.9 per cent to $25.27, Northern Star was up 2.5 per cent to $9.11, Evolution climbed 3.5 per cent to $3.82 and St Barbara gained 2.9 per cent to $1.255.

Camera IconThe tech sector has been smashed this week as inflation fears wreck havoc. NCA NewsWire / James Gourley Credit: News Corp Australia

Investors may have initially been shocked to see a mammoth 10 per cent fall for mining giant BHP, but that decline had very little to do with iron ore prices or the company’s performance.

The firm finished at $43.02 after trading ex-dividend.

Woodside Petroleum changed its ticker to WDS and is now known as Woodside Energy following a shareholder vote in favour of merging with BHP’s petroleum assets.

The company gained 0.7 per cent to $29.18 to rise alongside fellow energy sector players Santos, Whitehaven Coal, Viva Energy, Ampol and Origin.

Among the lenders, Commonwealth Bank added 1 per cent to $106.17, Westpac rose 1.4 per cent to $23.87, NAB jumped 1.8 per cent to $31.66 and ANZ finished 1 per cent ahead at $25.63.

Macquarie Group fell another 0.3 per cent to $178.27.

Woolworths rose 1.9 per cent to $35.07 and rival Coles gained 2 per cent to $18, while Wesfarmers gained 1.1 per cent to $46.83. Metcash was another winner among consumer staples with a 2.1 per cent rise to $4.33.

Telstra rose 1.6 per cent to $3.93 and fellow blue-chip Transurban rose 1 per cent to $14.48, although there were losses for CSL, Resmed, Aristocrat Leisure, Brambles, James Hardie and REA Group.

Originally published as Markets wrap: ASX finishes higher despite ongoing tech sector slump

Get the latest news from in your inbox.

Sign up for our emails