Miserable session for ASX investors

ASX investors were battered and bruised on Friday as a savage Wall Street sell-off washed through and knocked all but a handful of companies into the red.

A miserable end to a miserable week wiped another 2.2 per cent – or about $50 billion – from the benchmark ASX 200 in the worst trading session since Russia invaded Ukraine back in February.

ASX investors were in flight mode from the opening minutes following an overnight drop in the US that left tech titans such as Tesla, Apple, Amazon, Meta and Netflix hurting badly.

The wave of selling cascaded over local markets and knocked the main index down by as much as 2.7 per cent by noon, a decline of $60 billion, to a near two-month low of 7161.4.

That nadir came after the Reserve Bank of Australia massively increased its trimmed mean inflation forecasts to 4.75 per cent by December, having previously urged patience on the fight against soaring consumer prices.

The ASX 200 did claw back a little bit of ground but still finished a whopping 159.1 points lower at 7205.6 for a weekly loss of 3.1 per cent.

Much like in the US, local tech firms copped the worst of the selling.

Afterpay owner Block Inc fell 1.8 per cent to $142.91 after an overnight earnings miss.

Accounting software firm Xero lost 9.1 per cent to $85.57, WiseTech Global was 5.6 per cent down at $41.37, Appen lost 2.2 per cent to $6.55, and Altium was down 4.6 per cent to $30.64.

The broader All Ordinaries fell by 171.6 points, or 2.3 per cent, to 7467.6, while the Aussie dollar tumbled back below 71 US cents at the local close.

Many credited Friday’s decline to a Federal Reserve hangover.

Indeed, any enthusiasm traders showed after Wednesday’s market-pleasing US Fed statement quickly evaporated as the reality of the inflation fight ahead crept back in.

Other pointed to the Bank of England and its overnight warning of a “significant adverse impact” from the sharp rises in global energy and tradeable goods prices as well as a likely decline in real incomes and company profit margins.

“The BOE basically said there was going to be a recession next year, somewhat at odds with the Federal Reserve’s statements that a soft landing was possible in the US,” OANDA Asia Pacific analyst Jeffrey Halley said.

City Index analyst Tony Sycamore, however, noted Friday’s sell-off took place amid a long list of uncertainties, including the Fed‘s aggressive tightening cycle, high inflation and slowing growth.

“While Fed chair (Jerome) Powell stated (on Wednesday) that he is confident he can engineer a soft landing for the US economy, he is attempting the central banker equivalent of landing an Airbus 380 on Bankstown Airport,” Mr Sycamore said.

“There is a considerable risk of overshoot.”

Macquarie Group shares sagged 7.8 per cent to $186.90 even after the investment bank reported soaring full-year profits and an increased dividend.

Chief executive Shemara Wikramanayake had also urged caution amid volatile market conditions.

Commonwealth Bank fell 1.3 per cent to $102.40, NAB was 2 per cent lower at $31.62, ANZ lost 0.6 per cent to $26.76 and Westpac shed 0.8 per cent to $23.83.

Mining blue-chip BHP fell 1.4 per cent to $46.80 and Rio Tinto was down 2.1 per cent to $109.26.

Fortescue Metals managed to close flat at $20.83 and Falcon Metals was similarly unchanged at 32 cents, but there were big losses for the remaining gold, lithium, coal and base metal producers.

Blood giant CSL lost 2.9 per cent to $268.16, Cochlear was 4.2 per cent down at $219.39, Sonic Healthcare fell 1.5 per cent to $35.94 and Pro Medicus slumped 6.7 per cent to $42.63 to weigh on the healthcare sector.

A rare pocket of joy could be found in consumer stocks, with supermarket Woolworths posting a slight gain to $38.15, rival Coles up 1 per cent to $18.67 and Wesfarmers 0.3 per cent higher at $49.60.

Fisher and Paykel gained 2.3 per cent to $19.84 and fellow health stock PolyNovo jumped 4.1 per cent to 90 cents to be the best two performers on the day.