Plunge in Tech shares drags ASX down
The local benchmark was down across the board on Monday after a negative lead in from Wall St overnight.
The S & P/ASX 200 closed 0.7 per cent or 48.6 points lower, to finish at 7,230.4, while the broader All ordinaries also fell 0.7 per cent or 54.5 points to 7,428.1.
All 11 sectors finished in the red, with tech stocks leading the sell-off, down 2.7 per cent.
Sector heavy weights Xero fell 4 per cent to $118.35 a share, Wisetech Global fell 2.5 per cent to $67.46, and Altium fell 2.1 per cent to $45.00.
Other losses came from energy stocks, which fell 1.3 per cent despite oil prices remaining at near 10-month highs.
In company news, Costa Group dropped 3.4 per cent on news that private equity firm Paine Schwartz Partners would slash the amount it was prepared to pay for the fruit and vegetable processor from $3.50 per share, made in May, down to $3.20 per share.
Mark Bouris’ Yellow Brick Road fell 10.3 per cent. With the stock to be delisted soon, shareholders will get the chance to top up shares through a final purchase plan in the coming weeks.
Zip Co slumped 6.3 per cent on news that the firm’s chief financial officer Martin Brooke will step down from the role at the end of this month. Former Westpac general manager of group finance Gordon Bell is expected to replace Brooke.
The a2 Milk Company fell 1.1 per cent to $4.43 a share on news that it was cancelling its exclusive deal with long-term supplier Synlait Milk. The exclusivity agreement relates to a2 Milk’s infant milk formula products that are sold in Australia, New Zealand and China.
Tim Waterer, chief market analyst at KCM Trade said sentiment was subdued as markets awaited key interest rate decisions from the Federal Reserve, Bank of Japan and Bank of England later this week.
“Risk Aversion was doing the rounds on the Australian market today ahead of what is shaping is a big week of central bank decisions around the globe,” Mr Waterer said.
“Investors will be particularly sensitive about what sort of messaging comes from Fed Reserve chairman Powell about the future path of US interest rates.”
Mr Waterer added that with recent US inflation readings coming in above expectations, markets would be wary of further hikes at the Fed’s November meeting.
“If we do see sort of a continuation of these high oil prices feeding into higher inflation and cost pressures in the economy, it's certainly not out of the question that the Fed might have to act again before year end,” he added.
In local central bank news, former RBA deputy governor Michele Bullock began her seven-year term as Australia’s top central banker on Monday, replacing ex-governor Philip Lowe.
