The Business Times

Australia: Shares close higher on financials

Published Tue, Mar 9, 2021 · 03:50 PM

[SYDNEY] Financials helped Australian shares post gains for the second straight session on Tuesday even as technology stocks extended falls after their Wall Street peers were sold off overnight on concerns over steep valuations.

The S&P/ASX 200 index rose 0.5 per cent, adding to Monday's 0.4 per cent gain.

Overnight, the tech-heavy Nasdaq index entered correction territory, as rising US 10-year Treasury yields in recent weeks amid higher inflation views dented the attractiveness of equities and raised worries over lofty valuations.

Technology stocks in Australia fell 1.7 per cent to close at a five-month low, clocking their sixth consecutive losing session.

"There's a lot of fast money leaving the market that's been involved in the buy-now-pay-later sector. Some of those tech stocks are seeing people unwind their positions," said Henry Jennings, a senior analyst at Marcustoday Financial Newsletter.

The recent spike in bond yields is eroding confidence in growth stocks, he added. "People are all trying to get out at the same time, it's been a sector that's very hot." Buy-now-pay-later heavyweight Afterpay, which had a meteoric 88 per cent rise in 2020, shed about 3.6 per cent. Software companies Megaport and Xero fell 4.4 per cent and 3.8 per cent, respectively.

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Financial stocks supported the index with a 1 per cent gain.

A better-than-expected economic recovery, a strong housing market and easing margin pressures have supported the sector.

New Zealand's benchmark S&P/NZX 50 index ended 0.5 per cent higher.

REUTERS

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