Search by ticker code:
Generic filters

ASX 200 morning report – ASX tech & travel shares in focus

As expected after Friday’s horror session on the US markets, the Australian share market put in a tough day on Monday, with all 11 sectors that make up the S&P/ASX 200 (ASX: XJO) posting red ink.

The US slump, coming on top of continued concerns over the potential widening of the war in Ukraine, looming central bank rate hikes and worries about slowing growth in China, Australia’s major trade partner, heaped pressure on the local market that it could not shrug off.

The benchmark ASX 200 index finished down 88 points, or 1.2%, to 7,347, while the broader S&P/All Ordinaries (ASX: XAO) fell by 101.2 points, or 1.3%, to 7,623.6.

The tech stocks led the decline, with a 4% drop, rattled, like their US counterparts, by expectations of aggressive monetary tightening by central banks.

WiseTech Global Ltd (ASX: WTC) dropped 7.3% to $41.97, Xero Limited (ASX: XRO) gave up 6.6% to $90 after touching its lowest level since August 2020, and Tyro Payments Ltd (ASX: TYR) slid 5.6% to $1.19.

But the dubious honour of biggest loss in the ASX tech index was Aussie Broadband Ltd (ASX: ABB), which plunged 28.1% to $4 after downgrading its full-year earnings guidance.

Interest-rate rise today not a done deal

The market posted a slight recovery later in the day after unofficial figures from the Melbourne Institute showed inflation easing in April, which could prompt the Reserve Bank of Australia to wait for more data before lifting the cash rate; we will know today, but money market pricing shows that expectations for a rate hike today have fallen a little.

Many investors are bracing for what could be the RBA’s first cash rate increase in more than a decade, but there is also a school of thought among RBA-watchers that the bank does not want to hike rates during the election campaign, and would also prefer to wait for further data, particularly wages growth.

ASX travel shares the one bright spot

Travel was a rare winner, with a faster-than-expected recovery in domestic tourism supporting the sector.

Qantas Airways Limited (ASX: QAN) was up 2.9% to $5.76 after the national airline said it was seeing a “strong, sustained recovery in travel demand as Australia transitions to living with COVID” and that it expects to return to profitability next financial year.

Qantas said better-than-expected revenue had enabled it to reduce its net debt to $4.5 billion, from a peak of $6.4 billion at the worst of the pandemic-induced border closures.

The upbeat, third-quarter update predicted that underlying earnings in the six months to June 30 would come in between $450 million and $550 million, well ahead of analysts’ estimates.

Qantas’ renewed confidence was backed by travel agency group Helloworld Travel Group Ltd (ASX: HLO), which told the market that its bookings were up 60% in the March quarter from ayear ago, to $419 million.

Also in the sector, Helloworld shares gained 2.6% to $2.73, while Flight Centre Travel Group Ltd (ASX: FLT) added 1.8% to $22.99 and Webjet Limited (ASX: WEB) rose 1.2%, to $6.10.

Elsewhere, natural gas producers Beach Energy Limited (ASX: BPT), Karoon Energy Ltd (ASX: KAR) and Origin Energy Ltd (ASX: ORG) were all up as gas prices surged to a 14-year high, following Russia stopping deliveries to Poland and Bulgaria.

Wall Street claws back some of Friday’s losses

US markets started the job of recovering from Friday’s awful session, led by the tech-heavy Nasdaq Composite Index, which gained 1.6%, with much of that coming in the final hour of trading.

The S&P 500 rose 0.6% after dropping 3.6% on Friday, its biggest single-day decline in two years.

But the S&P 500 is off to its worst start to a year since 1939, falling more than 13% to the end of April.

The 30-stock Dow Jones Industrial Average eked out an 84.3-point rise, or 0.3%, to 33,061.5.

FREE & NEW: Our Complete Passive Income Strategy

With interest rates UP, now is one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% -- or more -- in dividend passive income from the best shares, LICs, or ETFs... it's like free money credited to your bank account.

So how do the best investors do it?

Whether you have $2,000 or $2,000,000, our Chief Investment Analyst Owen Rask has just released his brand new ASX Passive Income Report. Featuring the best dividend ETFs, LICs, funds and shares, this report cannot be missed by anyone wanting passive income in 2022 and 2023.

You can INSTANTLY access Owen's report -- or get it emailed to you -- for FREE by CLICKING HERE NOW or the button below.

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.