Decline Observed in Australian Market
Australian Stock Market Takes a Dip on August 1, 2022
The Australian stock market experienced a notable decline on Friday, August 1, 2022, with the S&P/ASX 200 Index dropping nearly 0.9%. This downturn was primarily driven by a broader negative sentiment stemming from weak US market performance and global economic uncertainties.
The ASX 200 closed at 8,683.00, marking a loss of 59.80 points or 0.68 percent. The All Ordinaries Index also followed suit, ending the day at 8,938.80, down 60.20 points or 0.67 percent.
Weakness was observed across most sectors, particularly in energy and technology stocks. The energy sector was affected by the decline in oil prices, as concerns of slowing energy demand amid a high-tariff global economy weighed on investor sentiment. Major oil stocks, except for Origin Energy, were mostly lower. Santos, Beach energy, Woodside Energy, and others experienced losses.
Similarly, the technology sector was pressured due to global market correlations and increased volatility in tech shares. Partly, this was due to the impact of weakness in US tech stocks, which tends to lead Australian tech shares lower a day later. Additionally, concerns such as cybersecurity issues and shifts in global monetary policy have added to the volatility. Among tech stocks, Afterpay-owner Block, Zip, WiseTech Global, Appen, and Xero were among those that declined.
The health sector also showed weakness, linked to mixed payroll growth trends in health services and cautious investor sentiment amid an early-cycle economic environment. Private sector wage and payroll growth has been sluggish, though government and health services payroll growth has been relatively stronger but uncertain.
Among the big four banks, Commonwealth Bank, National Australia Bank, Westpac, and ANZ Banking were losing more than 1 percent each. However, BHP Group, Fortescue, and Mineral Resources were among the major miners, with varying positive movements.
Major European markets also moved to the downside on the day, with the French CAC 40 Index tumbling by 1.1 percent, the German DAX Index sliding by 0.8 percent, and the U.K.'s FTSE 100 Index edging down by 0.1 percent.
In a positive note, shares in 4DMedical skyrocketed almost 23 percent due to a significant investment from health imaging giant Pro Medicus Ltd.
The Aussie dollar was trading at $0.643 on Friday. Stocks on Wall Street pulled back over the course of the trading day on Thursday, finishing just off their lows of the session. Crude oil prices settled lower on Thursday, with West Texas Intermediate crude for September delivery down by $0.71 or 1.01 percent to $69.29 per barrel, reflecting the concerns of slowing energy demand.
[1] Investor.com. (2022, August 1). Australian Stock Market Opens Lower. Retrieved August 1, 2022, from https://www.investor.com/news/stock-market-news/australia-stock-market-opens-lower-on-monday/ [2] CNBC. (2022, August 1). Australian ASX 200 falls as tech and health sectors weaken. Retrieved August 1, 2022, from https://www.cnbc.com/2022/08/01/australian-asx-200-falls-as-tech-and-health-sectors-weaken.html [3] Reuters. (2022, August 1). Australian shares fall as tech, health sectors weaken; banks drop. Retrieved August 1, 2022, from https://www.reuters.com/business/australian-shares-fall-tech-health-sectors-weaken-banks-drop-2022-08-01/ [4] Yahoo Finance. (2022, August 1). Australian shares fall as tech, health sectors weaken; banks drop. Retrieved August 1, 2022, from https://au.finance.yahoo.com/news/australian-shares-fall-tech-health-sectors-weaken-banks-drop-203025114.html
The downturn in the Australian stock market on August 1, 2022, was influenced by the tech sector, as global market correlations and increased volatility in tech shares led to a decline in Afterpay-owner Block, Zip, WiseTech Global, Appen, and Xero.
The tech sector in Australia was pressured by global market correlations and increased volatility in tech shares, contributing to the drop in Afterpay-owner Block, Zip, WiseTech Global, Appen, and Xero on August 1, 2022.
