The ASX 200 fell for the third session in a row, dragged down by our big four banks, Woolworths and Coles, as well as technology stocks, following the release of the worst inflation numbers in over 20 years.
The ASX 200 trimmed its losses but still closed down 0.8%, down 56.8 points to 7261.2, its third consecutive drop after ABS reported that annual inflation has now reached 5.1 %, raising the prospect of rate hikes sooner rather than later.
The tech sector led the declines, with Afterpay owner Block closing down 5.9%, after US tech stocks led declines on Wall St overnight.
The big four banks were also down, with Commonwealth Bank down 1.7 percent and ANZ Group closing down 2.6 percent.
But the Australian stock market is expected to continue to outperform US markets thanks to our reliance on commodities, rather than technology.
“In this environment with inflation and rising commodity prices, the Australian equity market is likely to outperform the US equity market, dominated as it is by heavyweight miners and equities. like big banks, which can benefit from wider spreads as rates rise. said Russel Chesler of VanEck.
“By contrast, the tech-heavy US stock market has fallen this year on higher bond yields. VanEck expects this trend to continue into 2022 as higher commodity prices are likely to persist and support the Australian equity market even as bond yields and inflation rise.”
Sour tech sentiment wasn’t the only problem for Life360, which closed more than 29 percent lower after a market update this morning reporting it expects to break even on cash flow for the December 2023 quarter. .
In other news, AMP has confirmed the sale of its real estate and domestic infrastructure business to Dexus Funds Management in a deal valued at around $250 million, but the wealth manager will continue to seek a buyer for its other businesses.
Commonwealth Bank Chairman Catherine Livingstone will step down from the banking giant’s board in August after more than five years in the role, to be replaced by former Bluescope chief executive Paul O’Malley.
Shares of The Reject Shop plunged more than 24 percent after the retailer said its chief executive, Andre Reich, had resigned yesterday to pursue other opportunities.