ASX falls, EML plunges 20% as Flight Center jumps on bullish forecast
Australian stocks struggled to gain momentum as gains in miners on the back of firm commodity prices offset losses in technology and financial stocks.
- The ASX 200 has lost 8.7% since the start of the year
- On Friday, the Dow Jones index fell 0.4%, the S&P 500 lost 0.9% and the Nasdaq Composite fell 1.9%.
- Meanwhile, the pan-European STOXX 600 index rose 0.3%
After a modest gain in early trade, the ASX 200 fell 8 points or 0.1% to 6,783 at 12:27 p.m. AEST.
Meanwhile, the Australian dollar was down at 69.06 US cents.
Miners gained 1.1%, with industry majors BHP, Rio Tinto and Fortescue Metals adding between 1.1% and 2.1%.
Iron ore prices rose on Friday as falling steel inventories at the world’s largest steel producer, China, signaled demand for resupply.
Diversified miner South 32 jumped 2.1% after reporting an increase in metallurgical output in the fourth quarter at its flagship Illawarra project in New South Wales.
Tech stocks were the main drag, losing nearly 1% after the major Wall Street indexes closed on Friday.
Shares of EML Payments fell 21% to $0.95 and were on course for their worst session since July 11 if losses hold.
The company said its Irish unit, PFS Card Services (Ireland) Ltd, had made adjustments to its remediation program after the Central Bank of Ireland identified some shortcomings following a review of its remediation framework. Risk Assessment.
The firm expects adjustments to the remediation program to result in finalization of the insurance in 2023.
Financials (-0.3pc) fell slightly, with three of the four big banks trading in negative territory.
Gold stocks gained 0.6%, while energy stocks fell 0.9%.
Newcrest Mining, Australia’s largest yellow metals miner, and heavy oil giant Woodside Energy fell 0.2% and 0.8% respectively.
Flight Center shares jumped 4.9% as the company said it had cut its 2021-22 loss forecast to a range of $180 million to $190 million from an initial range of $195 million. dollars to $225 million, due to a “strong rebound in global travel demand.” “.
It said it now expects to break even based on underlying core earnings for six months through June 30.
Wall Street down
Wall Street posted modest early-trading losses on Friday, but S&P 500 declines accelerated as Big Tech names such as Meta and Alphabet lost ground following Snap Inc’s earnings, which plunged 39.1%.
Defensive sectors such as utilities and consumer staples were among the few to advance.
“Every rally we’ve had in this bear market, there’s been a number of sharp rallies and then they fade and we set new lows, and it’s been a pretty consistent pattern here,” Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York, said.
“Everyone is looking for the turn, everyone is trying to guess when we will have a sustained rally and everyone is hoping for one. But for me there is still a lot of unknown ahead of us.”
With 106 of the S&P 500 companies reporting earnings through Friday morning, 75.5% beat analysts’ expectations, below the 81% beat rate over the past four quarters, according to Refinitiv data.
The Dow Jones Industrial Average fell 138 points, or 0.4%, to 31,899, the S&P 500 lost 37 points, or 0.9%, to 3,962 and the Nasdaq Composite fell 226 points, or 1 .9%, to 11,834.
For the week, the Dow Jones rose nearly 2%, the S&P 500 gained 2.6% and the Nasdaq rose 3.3%.
The Dow and S&P gains marked their biggest weekly percentage gains in four.
Recent data showed signs of a slowing economy, but the Federal Reserve is still expected to raise US interest rates by 75 basis points at its policy meeting to fight inflation.
On Thursday, the European Central Bank (ECB) raised rates by 50 basis points after indicating for weeks that a 25 basis point hike was in sight.
The pan-European STOXX 600 index closed 0.3% higher and the MSCI gauge of stocks across the world lost 0.4% after climbing to 624, its highest level since June 10.
The MSCI index climbed 3.1% on the week and the STOXX 600 posted its biggest weekly percentage gain in two months, in part due to easing concerns over a possible energy crisis.
In oil markets, Brent crude was up, trading at US$104.03 a barrel as of 10:24 a.m. AEST.