ASX falls for third consecutive day on fears of rate rise in US

The Australian sharemarket has been thumped for the third day in a row, with fears of a rate rise in the US denting global markets.

Australia’s sharemarket has hit its lowest point in five weeks after US inflation figures sparked fears of a spike in interest rates.

The S&P/ASX 200 index fell 62.2 points or 0.9 per cent to 6882.7 while the All Ordinaries tumbled 72.1 points or 1 per cent to 7209.

Local stocks were quick to follow sharp falls on Wall Street, with the three major US indices tumbling more than 2 per cent after the release of inflation data that pointed to a potential interest rate hike by the Federal Reserve.

The Dow pulled back 2 per cent, the S&P 500 slumped 2.2 per cent and the Nasdaq closed 2.7 per cent lower.

The S&P/ASX 200 index fell 0.9 per cent, or 62.2 points to 6882.7. Picture: NCA NewsWire/Dylan Robinson

“Higher inflation figures released in the US overnight sent markets tumbling, with the tech stocks the heaviest hit,” OpenMarkets chief executive Ivan Tchourilov said.

“Core (US) CPI was forecast to come in flat at 0.3 per cent but came in triple that at 0.9 per cent.”

Local tech stocks were whacked the hardest of any other sector, with Afterpay slumping 5.4 per cent to $84.50, while EML Payments dropped 1.7 per cent to $5.20.

“The stock (Afterpay) is in a pretty fierce correction at the moment and is approaching oversold territory, but sentiment is quite negative in the tech space in general right now, so it wouldn’t surprise to see them continue to push lower in the near term,” Mr Tchourilov said.

Mining services company Perenti Global was the worst performer in the ASX200, plummeted 29.2 per cent to 69 cents, while Whitehaven Coal topped the index, up 6.4 per cent at $1.26.

Cloud accounting software Xero plunged 13 per cent to $117.39 despite revealing a profit bounce “but clearly not enough to warrant their lofty valuation”, Mr Tchourilov said.

Afterpay was hit hard by the slump in tech stocks. Picture: NCA NewsWire/Andrew Henshaw

GrainCorp rose 5.2 per cent to $5.43 after lifting its full-year profit guidance on the back of shifting grain and oilseeds to new export markets instead of China.

Treasury Wine Estates added 2.7 per cent to $10.22 after saying it expects 33 per cent profit growth in the half year ended June 30 and has also been able to move into other markets following the crippling tariffs imposed by China last year.

Explosives manufacturer Orica fell 0.6 per cent to $13.33 after revealing its half yearly profits more than halved compared to the prior year.

Crown closed 0.4 per cent lower at $12.75 despite the New South Wales gaming regulator suggesting the company could obtain a gaming licence for its new Sydney casino by the end of year.

Star Entertainment confirmed it would cease all international junket operations following last year’s damning NSW inquiry into its rival, but ended the session 2.7 per cent lower at $3.95.

Treasury Wines made gains after an earnings upgrade. Picture: Carla Gottgens/Bloomberg

Travel stocks were still feeling the pinch of expectations the international travel suspension will last longer than previously thought.

Qantas was down 2.2 per cent at $4.40 and Webjet fell 1.1 per cent to $4.57, while Flight Centre bucked the trend, lifting 0.9 per cent to $14.91.

The index’s three day slump weighed heavily on major miners, with Rio Tinto losing 1.6 per cent to $128, BHP shedding 1.3 per cent to $50.35 and Fortescue sinking 4.05 per cent to $23.44.

Westpac closed flat at $25.19, National Australia Bank inched 0.08 per cent higher to $25.96, ANZ rose 0.85 per cent to $27.15 and Commonwealth Bank climbed 0.4 per cent to $95.98.

Telstra fell 1.15 per cent to $3.44 after being slapped with a whopping $50m fine for selling mobile phone contracts to more than 100 Indigenous customers who couldn’t understand or couldn’t pay for the plans. It is the second highest penalty ever imposed under the Australian Consumer Law.

Bunnings owner Wesfarmers was 0.7 per cent lower at $53.89 and Woolworths dipped 0.5 per cent to $40.29.

Spot gold was $US1820.5 an ounce while the Australian dollar was buying 77.2 US cents in afternoon trade.

Originally published as ASX falls for third consecutive day on fears of rate rise in US