Widespread ASX selling on US rate warning

Steven Deare |

Broad-based selling has the Australian share market down by more than one per cent after investors fretted that the US Federal Reserve will raise rates sooner than expected.

Technology shares were most affected on Thursday and fell more than four per cent on the local market.

Afterpay shares plunged by almost 10 per cent to $72.67. The company may be removed from the ASX this month if it completes its merger with US payments giant Block.

Cargo software provider WiseTech Global was another big name technology stock to plummet. Shares lost 5.09 per cent to $55.16.

Property and consumer discretionaries were the categories which fared next worst. Each lost a little more than two per cent.

The benchmark S&P/ASX200 index was down 90.1 points, or 1.19 per cent, to 7475.7 points at 1200 AEDT.

The All Ordinaries index dropped 99.7 points, or 1.26 per cent, to 7799.9 points.

Overnight US markets closed lower after the minutes of the US Federal Reserve December meeting showed policymakers concerned about the job market and unabated inflation.

They flagged the possibility of raising rates sooner and reducing economic stimulus to slow the economy.

The Nasdaq plunged more than three per cent, its biggest one-day percentage drop since February.

On the ASX, lender and credit provider Latitude has offered to buy the consumer business of buy now, pay later provider Humm Group for about $335 million.

The payment will consist of 150 million Latitude shares and $35 million cash.

Latitude is offering Humm Group chief executive Rebecca James a role leading the combined business.

Latitude shares rose 1.78 per cent to $2.0, while Humm shares slipped 1.67 per cent to 88 cents.

Insurance giant IAG finalised its reinsurance for this year at the same value – up to $10 billion – as last year.

The cost of the reinsurance has increased but IAG said this was in line with expectations.

Shares were up almost one per cent to $4.43. 

The big banks were faring better than most on the market. ANZ, NAB and Westpac lost less than one per cent each. The Commonwealth dropped about one per cent to $102.11.

Materials shares were the best performers and were little changed.

BHP, Fortescue and Rio Tinto each climbed a little more than one per cent.

Evolution Mining has completed its purchase of the Ernest Henry copper-gold mine in Queensland.

Evolution paid Glencore $800 million for the mine and will pay another $200 million in January next year.

Goldminers were lower however and Evolution shares lost 2.32 per cent to $3.98.

Foreign exchange traders rushed for the US dollar in the wake of the projected interest rate hikes.

The Aussie dollar lost value as a consequence. It was buying 72.14 US cents at 1200 AEDT, lower from 72.29 US cents at Wednesday’s close.