Markets wrap: ASX hands back gains after tech names fuel Monday morning surge

Investors started strongly but clearly got the shakes during Monday’s ASX session, with the local market sliding into the close.

ASX investors handed back an early lead to finish Monday’s session flat with traders peering overseas for clues as to whether the recent sharemarket rally still has legs in.

The local benchmark jumped by as much as 0.6 per cent in early trade as Friday’s momentum spilt into a new week – especially where technology stocks were concerned – with the bourse rising to its highest mark since the conflict erupted in Eastern Europe.

But investors lost their gumption as Monday’s session wore on and the ASX 200 eventually ended 15.9 points, or 0.22 per cent, lower at 7278.5.

The broader All Ordinaries fell 12.3 points, or 0.16 per cent, to 7558.9 while the Aussie Dollar – having edged above 74 US cents – eased back to 73.97 US cents at the local close.

Markets both home and abroad had surged into the weekend amid optimism a diplomatic solution for the Ukrainian crisis can be found and satisfaction that any rate hikes needed to contain associated inflation pressures will be predictable and measured.

The ASX 200 eventually ended Monday’s session 15.9 points, or 0.22 per cent, lower at 7278.5.Picture: NCA NewsWire / Damian Shaw

US technology names such as Nvidia, Telsa, and Facebook parent Meta duly surged into the end of the week to help local contemporaries start strongly on Monday, with Afterpay parent Block, Xero, Altium, Appen, EML Payments, and Tyro Payments among the big winners.

However, weakness across the major banks, healthcare firms, supermarkets, gold miners, and industrials proved too much for those hoping for a fourth straight session of gains.

IG Markets analyst Kyle Rodda said a souring of sentiment across US futures markets offered some forewarning for Monday’s fade with investors likely to be glued to Wall Street and European markets for guidance.

“European and US futures are pointing to a soft start to the trading week, after what was, of course, the biggest rally in equities last week we’ve seen since November 2020,” Mr Rodda said.

“A key question will be whether that move was really a reflection of easing concerns about the war in Ukraine and monetary policy, or just some function of technical factors like options expiry and a short-squeeze.

Shares in Afterpay parent Block gained 9.2 per cent on Monday after US tech stocks leapt into the weekend. Picture: NCA NewsWire/Bianca De Marchi

“Whether the rally continues this week will tell whether it was the former or latter.”

Oil and ore prices improved over the weekend to give local resources firms a boost on Monday.

BHP climbed 0.4 per cent to $46.45, Fortescue Metals rose 0.8 per cent to $18.71 and Rio Tinto edged 0.1 per cent higher after iron ore once again topped $US150 per tonne.

Woodside Petroleum jumped 0.9 per cent to $31.65 and Santos was up 1.1 per cent to $7.62 on higher crude values but a softening gold price hit the likes of Newcrest Mining, Northern Star, Evolution, and St Barbara.

None of the Big Four Banks made headway – with only ANZ finishing flat at $27.58 – while fund manager Magellan Financial lost another 4.3 per cent as news filtered through that its former chairman and star stockpicker Hamish Douglass had quit the board for health reasons.

Blood giant CSL was a major drag on the market with a 1.5 per cent drop to $266.97.

Markets both home and abroad had surged into the weekend amid optimism a diplomatic solution for the Ukrainian crisis can be found and satisfaction that any rate hikes needed to contain associated inflation pressures will be predictable and measured. Picture: NCA Newswire /Gaye Gerard

Also in the red were fellow healthcare names such as Sonic, Resmed, Pro Medicus, Mesoblast, and Clinuvel.

Offering resistance were a suite of technology stocks, the clear leader being Block.

The Afterpay owner finished 9.2 per cent higher at $184.40, with EML Payments gaining 6.1 per cent to $2.61, Tyro Payments 2.3 per cent higher at $1.755, Altium gaining 2 per cent to $33.36, Appen 1.2 per cent ahead at $7.05, and Xero 2.4 per cent higher at $101.49.

Woolworths and Coles fell while toll road manager Transurban lost 2.4 per cent to $13.25.

Aristocrat Leisure, Telstra, Qantas, Brambles, and Amcor were among the other big names to slip.

Originally published as Markets wrap: ASX hands back gains after tech names fuel Monday morning surge