Australia: Shares tumble 1% as tech stocks track Nasdaq peers lower

[MUMBAI] Australian shares dropped 1 per cent on Friday (Jan 14), with tech and software firms leading broad losses, after their Wall Street peers succumbed to multiple US Federal Reserve officials making hawkish remarks about interest rate hikes soon.

The S&P/ASX 200 index ended 1.1 per cent lower at 7,393.90.

The benchmark rose 0.5 per cent on Thursday. For the week, it fell 0.8 per cent.

Tech-heavy Nasdaq stocks led Wall Street losses overnight, snapping a 3-day rally, on talks signalling Fed would hike interest rates as early as in March.

Global markets also took a hit as investors braced for tighter monetary conditions.

In Australia, tech stocks fell nearly 4 per cent to hit a 7-month low. "Buy now, pay later" darling Afterpay, soon to be bought over by Block, slid as much as 9 per cent to its lowest level since August 2020.

With interest hikes expected soon, "tech sectors are probably going to continue to struggle", said Henry Jennings, senior analyst and portfolio manager at Marcustoday Financial Newsletter.

Financials dipped nearly 1 per cent and ended 1.2 per cent for the week, after 6 consecutive weekly gains. Commonwealth Bank of Australia and Westpac both fell more than 1 per cent.

With the earnings coming in for the US, "the (local) banks may take their cues from the US Banks, but I think they're going to face some headwinds because we got the RBA meeting at the beginning of February where we'll hear more on the pace of interest rate hike in Australia", Jennings added.

Covid-19 hospitalisation rates in Australia's most populous state of New South Wales could plateau next week, although pressure on hospitals will likely remain for "the next few weeks", said Susan Pearce, the state's health deputy secretary.

New Zealand's benchmark S&P/NZX 50 index fell 0.3 per cent to close at 12,790.16, with retirement village operator Ryman Healthcare down as much as 3 per cent.

REUTERS