view original post

The Australian share market is following a negative lead from Wall Street, where a tech sell-off over recent weeks has dragged the Nasdaq closer to a “correction”. 

A technical correction is where the value of an index falls 10 per cent or more. Since its most recent peak in mid-November, the Nasdaq has lost around 7 per cent of its value.

Most of that has come since the new year started, with Wall Street’s tech-heavy index off 4.5 per cent so far this year.

That included a 1 per cent slide on Friday that capped off the Nasdaq’s worst week in almost a year, with some big names such as Tesla included in the sell-off, with the electric car maker down 3.5 per cent that session.

“The absence of fundamental news for the tech space in this risk-off environment has catalysed a brutal surge of selling tech names to kick the year off in 2022 as valuation scrutiny remains front and centre for investors,” noted Daniel Ives and John Katsingris from US-based Wedbush Securities.

“With nervousness building and a white-knuckle environment around tech stocks in this tightening Fed backdrop, we view this as the most important upcoming earnings season for tech stocks in many years to turn the tide and derail the negative sentiment.”

Locally, tech names such as Afterpay (-2.4pc), Zip (-3.7pc), Wisetech Global (-4.2pc) and NextDC (-2.4pc) were being sold down in morning trade.

However, the dominant mining and energy sector was helping to keep the Australian share market from posting bigger falls.

BHP (+2.1pc), Rio Tinto (+1.9pc) and Fortescue (+3.4pc) were all strongly higher, as were many smaller miners such as South32 (+3.4pc).

Energy stocks were also seeing gains, with Woodside Petroleum (+2.3pc), Santos (+1.3pc) and Origin (+0.9pc) all gaining ground.

Energy generator and retailer AGL was one of the market’s strongest performers, up 8.1 per cent to $6.79 by 10:55am AEDT, in part on some positive analyst comments following previous price declines last year.

Overall, the benchmark ASX 200 index was down 0.4 per cent to 7,423 around 11:00am AEDT and the broader All Ordinaries was off 0.5 per cent to 7,740 points.

The Australian dollar was trading at 71.77 US cents.