Last Orders: Small caps plunge, losing ground for 3rd straight week

The Australian share market has suffered its second-worst loss of the year, and although small caps haven’t been battered quite as much as their larger counterparts they still fell significantly.

The Small Ordinaries index closed Friday down 49.6 points, or 1.56 per cent, to a three-week low of 3,123.9, finishing the week down 0.73 per cent in its third straight week of declines.

The Emerging Companies index of micro-cap companies fell 1.74 per cent.

Losses were even greater on the top end of the market, with the ASX20 falling 2.56 per cent.

The All Ordinaries – the broadest index – dropped 2.32 per cent to finish the week down 1.75 per cent.

The selling was across the board with every sector hit. Tech stocks collectively fell by 5.3 per cent, their biggest drop since falling 5.6 per cent on September 4.

Industrials were the least hit, only falling 1.0 per cent.

The selloff came after a similar rout in the US, where the S&P500 fell 2.5 per cent and the NASDAQ dropped 3.5 per cent, and appears to be driven by surging bond yields.

Stock market investors haven’t liked the sharp upturn in bond yields one bit. Growth-oriented pockets of the market in particular have taken it on the chin lately, and—GameStop aside—today was no exception.

— Joe Rokop (@jr_strikezone) February 26, 2021

The yield on Australia’s 10-year bond was up 12.6 per cent to 1.884 per cent, its highest level since April 2019.

Buy now, pay later companies were particularly slammed, with Afterpay (ASX:APT) down 11.0 per cent to $119.52. Zip Co (ASX:Z1P) traded as low as $9.86 but recovered somewhat to finish at $10.40, down 5.0 per cent.

Nuix (ASX:NXL) was one of the worst performers, sinking 32.4 per cent to $6.06 after announcing half-year revenue had fallen four per cent year-on-year to $85.3 million. The $2 billion data analytics company listed on the ASX in December.

Small cap news

Site International (ASX:SIT) gained 23.5 per cent to 2.1c after announcing it had agreed to sell its Australian industrial and trades training facilities.

Domacom (ASX:DCL) rose 14.8 per cent to 7c after the fractional property investing platform issued an update about its pending acquisition of agricultural producer AustAgri.

Nex Metals Explorations (ASX:NME) gained 14.3 per cent to 3.2c on an update to its tailings processing trial project.

Redflow (ASX:RFX) dropped 3.0 per cent to 6.5c after the zinc-bromine flow battery manufacturer reported a half-year loss of $2.98 million, compared to $3.89 million a year ago.

Pentanet (ASX:5GG) declined 1.6 per cent to 6.3c despite reporting “strong market interest” in the Australian launch of its cloud-based game streaming service.