Tech strengthens ASX after Fed chair reassured Wall Street

The Australian stock market was little changed in Thursday afternoon trading after a mixed session on Wall Street, although all sectors except basic materials and healthcare stocks rose.

The S&P/ASX 200 rose 7.9 points, or 0.1 percent, to 7315.70 at 12:30 pm AEDT, helped by the IT sector after one of the largest technology companies listed on the ASX announced major staff cuts. Shares of department store Myer soared after the company said its half-year profit more than doubled and that further growth is on the way.

Wall Street is mixed in early afternoon trading.

Wall Street is mixed in early afternoon trading.Credit:AP

Cloud-based accounting software company Xero rose nearly 8 percent and led the large-cap gainers after it announced job cuts of up to 800 employees. The job cuts come as the company, which has expanded rapidly in recent years, faces a deepening downturn in the technology sector. Other IT stocks also rose, with WiseTech up 2.5 percent and Computershare up 0.3 percent.

Myer shares rose 18 percent after the department store owner said a recovery in CBD retail and strong online sales helped it post its best earnings result in nearly a decade. The coal mining groups Yancoal (up 3.6 percent) and Whitehaven (up 2.4 percent) also increased.

Heavyweight BHP (down 2.5 percent) weighed on the stock market as it traded for the first time without claims on its latest dividend, sending the materials sector broadly down 1.1 percent. Meridian Energy (down 3.4%) led the declining large-caps, followed by healthcare companies Cochlear (down 1.9%) and Fisher & Paykel (down 1.6%).


The patchy session on the ASX follows a day of mixed trading on Wall Street. The S&P 500 rose 0.1 percent, the Dow Jones lost 0.2 percent, while the Nasdaq rose 0.4 percent higher.

US stocks fell sharply on Tuesday after Federal Reserve Chair Jerome Powell said the Federal Reserve could accelerate rate hikes if pressures on inflation remain high. Such hikes can ease inflation by slowing the economy, but they also affect the prices of stocks and other assets, increasing the risk of a recession.

Powell again said overnight that inflationary pressures appear to be higher than previously expected. But he was also much more forceful than Tuesday in emphasizing that the Fed has not yet decided on the size of its future rate hikes. Tech strengthens ASX after Fed chair reassured Wall Street

Brian Lowry

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