Australia: Shares mark worst day in 2 weeks as tech stocks weigh
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[BENGALURU] Australian shares fell on Friday (Feb 11) to their worst day in 2 weeks, dragged by tech stocks after red-hot US inflation data fuelled bets on more aggressive interest rate hikes by the Federal Reserve and sent Wall Street sharply lower.
The S&P/ASX 200 index fell 1 per cent to 7,217.3, snapping a 3-day run of gains to mark its worst session since Jan 27. However, the benchmark gained 1.4 per cent for the week, its second in a row.
Technology stocks slid 3.8 per cent in their worst day in more than a week, with Block's Australian shares down 6.7 per cent, while Xero and WiseTech Global dropped 4.5 per cent and 3.4 per cent, respectively.
US stocks closed sharply lower overnight after consumer prices data came in stronger than expected and comments from a Fed official raised fears that the central bank would hike rates aggressively to tame inflation.
Meanwhile, Reserve Bank of Australia (RBA) Governor Philip Lowe said it was plausible interest rates could rise later this year, but there were risks in moving too early.
There are a lot of negatives in the Australian economy right now, including travel restrictions for international passengers and inflation issues, said Brad Smoling, managing director of Smoling Stockbroking.
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"It is a smart choice by the RBA not to raise rates until we see just how this plays out," he said.
Financials finished 0.5 per cent weaker, with Commonwealth Bank of Australia leading the decline, down 2.2 per cent. Brokerage Citi on Thursday cut its price target for the country's top lender on margin concerns.
However, Insurance Australia Group climbed 4.2 per cent on beating first-half profit and dividend estimates.
Miners rose 0.5 per cent, hitting a 3-week high on strong iron ore prices.
Sector heavyweights Rio Tinto, BHP Group and Fortescue Metals Group gained between 1.2 per cent and 2.9 per cent.
New Zealand's benchmark S&P/NZX 50 index dropped 1.9 per cent to 12,173.78 in its sharpest fall since Jan 28, 2021.
Data showed the country's near-term inflation was expected to rise in the first quarter of 2022. REUTERS
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