Xero shares plunged 9 per cent even after the biggest tech firm on the ASX said net profit in the six months through September jumped 42 per cent to $NZ134.8 million ($116.2 million) as analysts expressed concern about the software maker’s large investments in AI. Fellow software firms WiseTech Global and Technology One were down 2.1 per cent and 2.5 per cent, respectively, while AI data centre operator NextDC lost 4 per cent.
Rate-sensitive real estate investment trusts, which in a higher rate environment have to cope with elevated costs to service debts while holding less investor appeal for their yields than less risky assets such as bonds, also posted heavy losses. Data centre and warehouse owner Goodman Group dropped 2.2 per cent, while shopping centre landlords Scentre, Stockland and Vicinity slumped 3.3 per cent, 3.9 per cent and 4.9 per cent, respectively. Property developer Mirvac lost 3 per cent.
Energy stocks were deep in the red after oil extended its biggest decline since June on a flurry of signs that a long-awaited surplus has finally arrived. Global benchmark Brent fell toward $US62 a barrel after losing almost 4 per cent in the previous session. Producer group OPEC said in its latest market snapshot that global supply topped demand in the third quarter.
Oil and gas giant Woodside dropped 2.8 per cent, its rival Santos lost 2.2 per cent and Ampol, Australia’s biggest refiner, shed 1.8 per cent.
Webjet Group plummeted 17.2 per cent after the online travel agent shocked with a profit warning, saying this financial year’s underlying earnings would be down as much as 14 per cent due to the “ongoing subdued trading environment” in leisure travel, which saw its bookings in the first half fall by 8 per cent. Meanwhile, shares of Flight Centre, which on Wednesday forecast a rise of up to 17.6 per cent in full-year underlying profit before tax, jumped 7.4 per cent.
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Financial stocks, which make up more than a third of the local market, were mixed. While CBA, the nation’s biggest stock, rebounded 1.1 per cent after suffering a 9.6 per cent sell-off over the past two sessions, the other big four banks fell. Westpac and National Australia Bank each dropped 1.1 per cent, and ANZ Bank, which is trading ex-dividend, lost 4.9 per cent.
Graincorp plunged 10.8 per cent after reporting its full-year net profit was down 35 per cent to $40 million. The company said it would make a profit forecast for the current year at its shareholder meeting in February, with the “global supply of grains and oil seeds expected to see a continuation of margin pressure”.
DroneShield plummeted 31.4 per cent, the most since July 2024, after chief executive Oleg Vornik revealed in an ASX filing he sold $49.5 million in the defence company’s shares over the past week.
Bucking the market trend were miners, which together with healthcare stocks were the only sectors in the green. The iron ore heavyweights BHP (up 0.6 per cent), Fortescue (up 2.4 per cent) and Rio Tinto (up 0.9 per cent) all held up, while a rise in gold prices boosted the gold miners. Northern Star was up 2.5 per cent, Evolution Mining rose 3 per cent and Newmont jumped 3.8 per cent.
Australia’s largest biotech CSL led the healthcare sector higher with a gain of 1.6 per cent.
Stocks benefiting from the artificial-intelligence frenzy have been shaky recently.Credit: AP
Orica shares rose 2.5 per cent after the mining explosives maker said its operating earnings jumped 23 per cent to $992 million in the year to September 30, its highest in 13 years, and flagged further growth in the current year, which it said started “with good momentum”.
BlueScope Steel gained 3.5 per cent after the steelmaker signed a deal to sell its 50 per cent stake in the Tata BlueScope Steel joint venture in India to its JV partner Tata Steel at a $70 million net profit.
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On Wall Street overnight, the S&P 500 Index inched up 0.1 per cent to keep its winning streak alive by the barest of margins. The tech-heavy Nasdaq 100 Index was down 0.1 per cent, paring an earlier decline of 0.6 per cent. The Dow Jones Industrial Average climbed 0.7 per cent to close at a fresh all-time high.
Stocks benefiting from the artificial-intelligence frenzy have been shaky recently as investors question whether they can add more to their already spectacular gains. Their sensational growth has been one of the top reasons the US market has hit records despite a slowing job market and high inflation. But their prices have shot so high that critics say they’re reminiscent of the 2000 dotcom bubble, which ultimately burst and dragged the S&P 500 down by nearly half.
with AP, AAP, Bloomberg
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