Afterpay owner savaged in tech bloodbath

Worrisome selling in the equity market resumed on Thursday following worrying US data, with one tech stock in particular trashed.

Wednesday’s reprieve appears to have been fleeting for ASX investors, with the local stock market resuming a worrying three-week spiral.

The benchmark ASX 200 fell 82.8 points, or 1.2%, on Thursday to momentarily dip below the key 7000 level and continue what has been poor form.

Much like in the US, local tech stocks have been hit hard.

Afterpay owner Block Inc plunged nearly 20% to $102, while accounting software company Xero fell 9.8% to $78.12, its lowest since April 2020, as that she was recovering from the sale of Covid-19.

Altium fell 8.1% to $27.81, Megaport fell 6% to $6.85, Airtasker fell 4.4% to 43 cents and Zip Co fell 3.8% to 96, 2 cents.

Cryptocurrencies fared little better amid the fresh market turmoil, while the Australian dollar remains subdued at under 70 US cents.

The local index managed to stem its recent savage losses on Wednesday thanks to gains from major mining companies such as BHP, Rio Tinto and Fortescue Metals.

Energy and materials stocks again helped support the index after a rebound in commodity prices. but banking stocks, consumer companies such as Woolworths, Wesfarmers and Coles, and healthcare names such as CSL and Resmed were pulling the other way.

The ASX 200 was down 1% at 6997.7, after slipping as low as 6981.9.

Rising inflationary pressures around the world triggered a steep bull run by central banks, which undermined the appeal of riskier assets such as equities.

China’s strict Covid-19 lockdowns also badly rattled the value of Australia’s resources sector, contributing to a nearly 9% drop to two-month lows on Tuesday.

On Thursday morning, traders took inspiration from Wall Street, where stocks fell overnight on worrying inflation data.

IG Markets analyst Hebe Chen said consumer prices in the United States rose at a slower pace in April – from 8.5% to 8.3% – but impatient traders were not happy with the pace.

Many fear that with inflation still near 40-year highs, the US Fed may be left with no choice but to proceed with a bigger rate hike of 75 basis points, after apparently withdrawing that option. of the table.

“The (data) released last night was even stronger than expected…suggesting that price pressure will persist at higher levels for longer, even though it has already peaked,” Ms Chen said.

As is usually the case when inflation is high and steeper rate hikes loom, growth stocks have been hit hard.

That included an 8.3% drop for Elon Musk’s Tesla, a 5.2% drop for gadget maker Apple, a 3.2% drop for Amazon and a 6.4% drop for Netflix.

Nasdaq giant Meta Platforms fell 4.5%, Microsoft fell 3.3% and Alphabet, Google’s parent company, fell 0.5%.

It was also a tough time for cryptocurrencies, with bitcoin dropping to $40,602.04 overnight.

That’s more than half of the $90,000 it was worth just seven months ago.

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