Australian shares fall on tech sell-off

By lunchtime on Thursday (AEST), the S&P/ASX200 was down 22.5 points, or 0.28 per cent, at 8035.4, while the broader All Ordinaries index was down 30.8 points, or 0.37 per cent, at 8272.7.

Late on Thursday morning, the Australian Bureau of Statistics said the number of people in employment rose by 50,000 in June, while the number of unemployed people rose by 10,000. The overall unemployment rate rose by less than a tenth of a percentage point to 4.1 per cent.

Sean Langcake, head of macroeconomic forecasting at Oxford Economics Australia, said the reading would be a mixed signal for the Federal Reserve ahead of its next meeting in early August.

“The labor market is slowing, with the rising unemployment rate becoming more entrenched,” Mr. Langcake said. “However, the market remains very tight. The current pace of employment growth suggests that demand is resilient and that cost pressures will persist.”

RBC Capital Markets chief economist Su-Lin Ong and JP Morgan economist Tom Kennedy said the reading likely would not tip the scales either way for the Federal Reserve, which will likely have a greater impact on second-quarter inflation data due July 31.

Eight of the 11 ASX sectors fell at midday, while energy, consumer staples and utilities saw slight gains.

The biggest drop was recorded by the technology sector, which fell 3.3%, marking its biggest one-day loss since April 3, when it fell 3.9%.

The sharp decline followed a similar sell-off on Wall Street, where the tech-heavy Nasdaq fell 2.8% – its biggest loss in 18 months – on reports that the U.S. was considering tough sanctions on China’s semiconductor industry.

Shares of Wisetech Global fell 5.9%, NextDC and Life360 fell 4.2%, and Xero fell 2.9%.

In addition, shares in CAR Group, owner of carsales.com.au, fell 3.0 per cent and shares in REA Group, owner of realestate.com.au, fell 3.4 per cent, although both companies are officially listed in the communications sector.

In the consumer discretionary sector, shares of Domino Pizza Enterprise fell 9.1% to a nine-year low of $32.81 after the fast-food restaurant chain operator said it would close dozens of underperforming locations in Japan and France.

Meanwhile, Accent Group rose 8.4% to a five-month high of $2.125 after the athletic shoe retailer said trading conditions improved in the second half of the year, with like-for-like sales up 4.1% from a year earlier.

In the heavy mining sector, Evolution rose 3.4% to $4,115 after the gold miner reported record free cash flow of $230 million in the June quarter, up from $85 million in the March quarter.

Elsewhere in the sector, BHP shares fell 0.2 per cent, Fortescue fell 0.8 per cent and Rio Tinto fell 0.4 per cent.

Three of the four largest retail banks rose: NAB rose 0.4 per cent, Westpac 0.3 per cent and ANZ 0.2 per cent. CBA was the exception, falling 0.5 per cent.

Former forum favorite Zip Co surged 10.9% to a one-week high of $1,789 after completing a $217 million capital raise at a small discount of 2.8%.

Droneshield shares fell 1.9% to $1,795 as investors hoped the stock would bottom out after heavy losses on Tuesday and Wednesday.

The Australian dollar was at 67.39 US cents, down from 67.33 US cents at the close of trading on the ASX on Wednesday.