Blame Facebook: ASX Thumbs Down

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The ASX closed lower and Facebook is to blame after weak earnings at its US parent company cast negativity in global markets.

Australian tech stocks fell 5% on Thursday following Meta’s fourth-quarter profit slump, caused by surging spending.

Some tech giants ASX had heavier than average drops.

Afterpay owner Block fell 9% to $145.80.

Shipping software provider WiseTech Global fell nearly eight percent to $42.59.

The earnings season in the United States is well underway and another tech giant, Amazon, is due to report its results on Wall Street this week.

However, investors in other ASX share classes need not be overly concerned. Most categories in the last session fell by less than 1%.

Materials stocks seemed immune to the influence of Wall Street. They increased by one percent.

BHP and Fortescue Metals each gained 3% and Rio Tinto rose 2% after iron ore prices rose.

The benchmark S&P/ASX200 index closed down 9.7 points, or 0.14%, at 7,078 points.

The All Ordinaries Index closed down 25 points, or 0.34%, at 7,374.6 points.

The debate over when central banks will raise interest rates amid the pandemic recovery will continue for the next 24 hours when the Bank of England and the European Central Bank meet.

Both regions are experiencing a spike in inflation caused by the economic stimulus. Analysts said the Bank of England was the more likely of the two to raise rates.

In Australia, the Reserve Bank will provide a detailed forecast of the economy and interest rates in its quarterly monetary policy statement on Friday.

The bank held rates at a record 0.1% on Tuesday and dismissed the notion that a rate hike was imminent.

On the ASX, Westpac reported first quarter earnings were 1% higher after strong contributions from the treasury and markets divisions.

Net profit increased by 80% compared to the quarterly average of the second half of the previous fiscal year.

Westpac was the top of the big banks and 2% higher at $21.07.

Crop and seed protection supplier Nufarm soared after revealing first-quarter sales rose 36% on the back of good weather and strong demand.

Sales were strong enough to offset rising costs, and the company said annual profits should be higher.

Nufarm rose 20% to $5.59.

Sydney Airport investors have voted for a $23.6 billion takeover bid from a consortium of investors.

Airport investors other than UniSuper would receive $8.75 per security if the proposal goes ahead. UniSuper, which owns 15% of the airport, will retain its stake under new ownership.

Sydney Airport rose 0.23% to $8.72.

Furniture trader Nick Scali reported a decline in first-half profits and its payout to investors.

The company had to temporarily close about half of its stores due to the coronavirus and net profit fell 6%.

Orders for this semester are up 31% compared to the previous year.

Nick Scali was up nearly one percent to $14.54.

The Australian dollar was buying 71.22 US cents at 1717 AEDT, down from 71.37 US cents at Wednesday’s close.

ON THE ASX

* The benchmark S&P/ASX200 index closed down 9.7 points, or 0.14%, at 7,078 points on Thursday.

* The All Ordinaries Index closed down 25 points, or 0.34%, at 7,374.6 points.

* At 1717 AEDT, the SPI200 futures index was down nine points, or 0.13%, at 6969 points.

CURRENCY OVERVIEW

One Australian dollar buys:

* 71.22 US cents, compared to 71.37 cents on Wednesday

* 81.57 Japanese yen, from 81.88 yen

* 63.04 euro cents, from 63.31 euro cents

* 52.56 UK pence, from 52.77 pence

* 107.56 New Zealand cents, from 107.53 cents.

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