Markets wrap: Blue-chip behemoths offset dire ASX session for lithium and tech firms

Lithium players, gold miners and technology stocks copped a hammering on Wednesday, but gains for a host of blue-chips managed to drag the ASX higher.

Gains for the iron ore giants and major banks proved just enough to offset a dizzying lithium sell-off which wiped about 20 per cent from the likes of Pilbara Minerals, Liontown Resources and Core Lithium.

The benchmark ASX 200 drifted 22.8 points or 0.3 higher on Wednesday, to close at 7234.0, with blue-chip behemoths such as Commonwealth Bank, BHP, Fortescue Metals, Transurban and Telstra putting in a solid shift.

But it was also a day in which more local companies finished lower than higher, including vast swathes of the technology and healthcare sectors, as well as the gold miners.

Demonstrating the top-heavy nature of the day was a more subdued performance by the All Ordinaries, which gained just 7.7 points or 0.1 per cent, to 7462.9.

The Australian dollar, meanwhile, lost a bit of ground against the Greenback and was 71.70 US cents at the local close.

The most savage losses on Wednesday were confined to lithium players.

The benchmark ASX 200 drifted 22.8 points or 0.3 higher to close at 7234.0, no thanks to lithium, technology and gold stocks.

Investors dumped anything touching battery metals after global investment bank Goldman Sachs warned the bull market of the past 18 months was fast coming to an end.

The bank said while lithium, cobalt and nickel would continue to play a key role in decarbonisation, those banking on the green revolution had perhaps gone too hard, too soon.

Adding to the lithium downturn was a decision by customs in Argentina – a key lithium producer – to set a reference price of $US53 on exports, essentially an attempt to clamp down on any chicanery that would hurt tax revenue and dollar sales.

In response, Pilbara Minerals sagged 22 per cent to $2.30, Liontown Resources was 19.1 per cent down at $1.145 and Core Lithium ended 20.4 per cent lower at $1.11.

Also caught up in the carnage was Mineral Resources, which fell 8.1 per cent to $58.70, while Piedmont Lithium lost 8 per cent to 86 cents, Lake Resources dropped 12.9 per cent to $1.35, Allkem shed 15.4 per cent to $11.60, Vulcan Energy dipped 8.2 per cent to $7.52 and IGO 11.7 per cent lower at $11.16.

More local companies finished lower than higher on Wednesday, including vast swathes of the technology and healthcare sectors, as well as the gold miners. Picture: NCA NewsWire / Christian Gilles

Technology was also back under pressure as inflation and interest rate jitters again reared their head.

Block Inc shed another 4.3 per cent to $120.55 to continue a volatile week, while rival payments firm Zip Co fell 8.7 per cent to 83.5 cents.

Xero dropped 2.2 per cent to $87.36 and Wisetech Global was down 0.9 per cent to $41.7 and Megaport lost another 4.9 per cent to close at $6.95.

Novinix – which straddles the divide between battery materials and technology – fell 12.7 per cent to $3.57.

The lead from Wall Street was a shaky one in the wake of the Memorial Day break while OANDA senior analyst Jeffrey Halley said wakening manufacturing data from across the Asia-Pacific also dragged on the region.

“Asian markets are trading with a negative tone today, with the ending of virus restrictions in Shanghai today having little to no positive impact,” Mr Halley said.

“Mostly that is due to the flip-flop of the day in US markets, which reopened overnight.

Pilbara Minerals sagged 22 per cent to $2.30, Liontown Resources was 19.1 per cent down at $1.145 and Core Lithium ended 20.4 per cent lower at $1.11.

“New York decided overnight to be nervous about Fed tightening once again, having dismissed it last week. Tomorrow, they may decide it‘s not a problem once again; who knows?”

Supporting sentiment on Wednesday was a rise in US futures and a robust first-quarter Australian GDP print.

Commonwealth Bank was the strongest of the lenders, with a 2.3 per cent jump to $106.71, while Macquarie Group rose 1.3 per cent to $188.38.

There were gains for Woolworths, Wesfarmers, Coles, Transurban, CSL and Telstra and the iron ore miners were also strong.

BHP added 2.3 per cent to $45.65, Rio Tinto climbed 0.4 per cent to $114.91 and Fortescue Metals was up 3.2 per cent to $20.76.

The same couldn’t be said for gold prospectors, with Newcrest losing 2.7 per cent to $24.37, Northern Star down 2.6 per cent to $8.72 and Evolution 3.9 per cent down at $3.69.

Originally published as Markets wrap: Blue-chip behemoths offset dire ASX session for lithium and tech firms