• Local shares fell 1.6% on Thursday following a broad-brushed selloff
  • Investors offloaded shares as Fed Chair Jerome Powell told Congress there will be more rate hikes
  • Short selling against US stocks have now surpassed US$1 trillion

 

The ASX tumbled over 1.6% on Thursday as all 11 ASX sectors finished in the red.

Overnight, tech stocks led a selloff on Wall Street as Fed Chairman Jerome Powell testified before Congress.

In his semi-annual report, Powell told the House Financial Services Committee hearing that nearly all FOMC participants expect that it will be appropriate to raise interest rates further by the end of the year, albeit at a slower pace.

Short sellers have been circling on US equities, with bets against US stocks now surpassing US$1 trillion, according to data from S3 Partners. Analysts believe that this signals the S&P 500’s roughly 14% rally in 2023 could soon run out of steam.

On the ASX, the Tech sector was the worst performer today, falling by almost 4%, followed by Real Estate and Energy.

Energy stocks fell despite oil prices holding their 2% gain overnight.

Elsewhere, Bitcoin is back up above US$30k, trading now at US$30,200.

“The SEC has been playing hardball with a Bitcoin ETF, and crypto watchers are speculating that BlackRock knows something,” said Oanda analyst Edward Moya.

Meanwhile, the Franklin Templeton Fixed Income team believes there will be no Fed rate cuts this year, and expects a shallow recession in the US and the Euro area.

The team said fixed-income assets should continue to provide strong levels of income, with many sectors now offering some of the highest yields seen in several years.

 

BIG CAP WINNERS

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Telecom firm Spark New Zealand (ASX:SPK) confirmed that Connexa has completed the acquisition of the passive mobile telecommunications tower assets of 2degrees from its owners Macquarie Asset Management and Aware Super. Connexa is the independent mobile towers business in which Spark is a shareholder.

Spark did not contribute equity to the acquisition and following today’s completion, its shareholding in Connexa is diluted from 30% to approximately 17%.

 

BIG CAP LOSERS

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Construction firm Johns Lyng (ASX:JLG) tumbled -8% after saying that its Commercial Construction revenue and EBITDA forecasts for the full year have been reduced by $7.9m and $5m respectively. JLG said the reduction is consistent with the headwinds facing this sector in Australia, and vindicates the company’s previously announced strategy to exit this business line.

Excluding this business, forecast revenue for FY23 has been upgraded by $110m to $1.19bn.

Gold Road Resources (ASX:GOR) says reliability and utilisation of the production drills and availability of blasting resources were below expectations for the quarter. These factors, together with a recent significant rain event, have negatively impacted ore and waste mining at Gruyere.

Based on anticipated outcomes of the recovery plan, Gold Road is now guiding 2023 annual production at between 320,000 and 350,000 ounces (previously 340,000 to 370,000 ounces).

 

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