ASX shares start lower as mining and tech stocks tumble
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More news: Australian shares lowered at the open, tracking losses on Wall Street overnight, as sharp losses by mining and tech stocks offset gains across the broader market.
The benchmark S&P/ASX 200 index was down 15.4 points, or 0.18%, to 8,798.3 at 10:50am AEDT. Seven of the 11 sectoral indices were in positive territory.
Mining (-2.4%) and tech (-2.2%) stocks weighed heavily on the market. Gold miners, led by Bellevue Gold (-6.8%), made up five of the worst 10 performers on the ASX 200 as gold prices slipped back below USD4,000 ($6,167.70) overnight. Lithium producers Liontown Resources (-8.4%) and Pilbara Minerals (-6.2%) also saw heavy losses.
Tech companies NextDC and Codan both fell around 3%, while Megaport (-2.9%), Life360 (-2.7%) and Technology One (-1.7%) also fell.
Jewellery retailer Lovisa (+2.5%) was the top performer after Citi upgraded its rating to 'buy'. Health insurer Medibank (+1.5%) also lifted after announcing its $159 million acquisition of GP network Better Medical.
Australian shares to rise after bank CEOs’ warning rattles Wall Street
The news: Australian shares are poised to open higher after US stocks fell sharply overnight as the chief executives of Morgan Stanley and Goldman Sachs warned that equity markets could be due for a drawdown.
The numbers: Updated at 7:30am AEDT:
- ASX futures: up 16 points, or 0.18%, to 8,828
- Wall Street: Dow Jones down 0.59%, S&P 500 down 1.18% and Nasdaq down 1.87%
- Europe: CAC 40 down 0.52%, DAX down 0.76% and FTSE 100 up 0.14%
- Spot gold: down 1.70% to USD3,935 per ounce
- Oil prices: Brent down 0.80% to USD64.37/bbl and US WTI down 1.06% to USD60.40/bbl
- AUD: down 0.79% at 64.88 US cents
- Bitcoin: down 6.4% to USD99,677.
The context: All three main Wall Street indices ended lower, with six of the "Magnificent Seven" megacaps losing ground.
The selloff came after Goldman Sachs CEO David Solomon told a conference in Hong Kong he expects a 10-20% drawdown in equity markets over the next 12 to 24 months. Morgan Stanley CEO Ted Pick said at the same event that 10-15% corrections should be welcomed as healthy market developments.
Investor nerves were further tested by Michael Burry’s bets against Nvidia and Palantir, which dragged on tech sentiment as both stocks were lower.
Tech was the worst performing sector on the S&P 500, down 1.9%. Palantir Technologies reversed an initial jump to fall 7.9% after issuing a better-than-expected Q4 revenue forecast. Uber (-5.7%), Shopify (-5.1%) and Spotify (-3.3%) also dropped after quarterly results.
Elsewhere, the US dollar hit its highest level since May, while gold dropped back below USD4,000 per ounce and Bitcoin tumbled below USD100,000 for the first time since June.
