On Wednesday, the Australian share market experienced a significant downturn, primarily attributed to an overnight tech rout on the Nasdaq, which cast a shadow over the local benchmark. The S & P/ASX 200 index plummeted by 53 points, marking a 0.7 per cent decline, ultimately closing at 7,153.9 points.
The broader All Ordinaries index fared even worse, witnessing a substantial drop of 57.3 points, or 0.8 per cent, settling at 7,345.6 points. This bearish trend was exacerbated by tech stocks, which saw their worst session for September, tumbling by 1.56 per cent. Additionally, losses were recorded in the Real Estate and Industrials sectors, both down by 1.2 per cent.
The trigger for this downward spiral in the Australian share market was the dramatic overnight slump in the Nasdaq, a prominent US stock market index heavily weighted towards technology stocks. The reverberations of this tech rout were felt across global financial markets, and Australia was not immune to its effects.
Tech behemoths Wisetech and Xero experienced a 2.2 per cent and 1.4 per cent decline, respectively, mirroring the trend on Wall Street closely observed by local traders. The lackluster performance of IT shares was a direct consequence of the Nasdaq’s overnight dip.
Among the tech stocks, software titan Oracle played a significant role in driving these losses, as its latest quarterly revenue fell slightly below analysts’ expectations.
Amidst the broader market downturn, energy stocks displayed resilience, closing with a modest gain of just 0.1 per cent. This positive performance came on the heels of a 2 per cent surge in crude oil prices, propelling them to a nearly 10-month high on Tuesday. The fresh projections provided by OPEC+ and the United States overnight painted a picture of a tighter supply outlook in the forthcoming months.
Brent futures advanced by $1.42, equivalent to a 1.6 per cent increase, settling at $92.06 per barrel, while West Texas Intermediate crude experienced a similar boost, rising by $1.55 or 1.8 per cent to reach $88.84 per barrel. In contrast, utility stocks also showed signs of strength, recording a 0.2 per cent ascent.
In the energy sector, the prominent player Woodside saw a modest gain of 0.5 per cent, closing at $37.88, while Santos experienced a slightly stronger increase of 0.7 per cent, reaching $7.77, and Beach Energy also advanced by 0.5 per cent, reaching $1.60.
However, Viva Energy faced a different trajectory, with its shares declining by 2.1 per cent to $2.87. This downturn followed the confirmation that Vitol, a major Dutch oil trading giant and a significant shareholder, was in the process of divesting 16 per cent of its stake in the company.
As a result of this sale, Vitol’s remaining ownership in Viva Energy is expected to stand at approximately 30 per cent.
