ASX Large Caps: New year party over as ASX slumps and tech sector tumbles

ASX closes lower on second trading day of 2024 after a lacklustre session on Wall Street
Following US lead tech sector leads laggards with all sectors in the red except consumer staples
Suncorp forecasts claims from ongoing weather events impacting east coast to be within its allowance

After a strong first trading day for 2024 yesterday in which the S&P ASX 200 hit a new 52-week high, it was a different story today.

As Stockhead’s Gregor Stronach so aptly described the markets in his ASX Small Caps Lunch Wrap today: “The New Year cheer on the ASX has lasted all of about 24 hours”.

The benchmark closed down 1.37% to 7,523.20 points, following a lacklustre first day trading for 2024 on Wall Street, which left the S&P 500 down 0.57%, and the tech-heavy NASDAQ falling 1.63%.

The Dow Jones index managed to stay just in the green, up 0.06%.

Sellers were piling into the NASDAQ, which saw gained more than 44% in 2023 after a strong tech rally. Apple led the losses and shed nearly 4% after Barclays downgraded the stock to underweight from neutral, citing disappointing demand for its iPhone 15.

The fall in Apple saw broader selling in the tech sector with Netflix falling almost 5%, while both Meta and Nvidia were both down more than 3%.

Furthermore, in a sign optimism central banks will soon start lowering rates is fading global bond yields headed higher.

The two-year US Treasury yield, which is considered by economists and analysts to reflect interest rate outlook, was up 8 basis points to 4.3%, while 10 year Treasury notes also went up 8 basis points to 3.9%, which is ~15 basis points above its six month low in December.

The yield on Australian three-year bonds, indicative of anticipated interest rates, increased by 8 basis points, reaching 3.69%, while the yield on 10-year bonds moved up by 9 basis points to 4.05%

Tracking the US tech led the ASX laggards. Real estate and materials were the next biggest losers, while consumer staples narrowly stayed in the green.

Source: Market Index

BIG CAP WINNERS

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Code Name Price % Change Volume Market Cap HGH Heartland Group 1.495 7% 1,018 $1,001,371,378 STX Strike Energy Ltd 0.49 3% 5,352,804 $1,359,557,284 EDV Endeavour 5.38 3% 2,803,930 $9,384,735,289 JLG Johns Lyng Group 6.2 2% 569,839 $1,689,472,637 MPL Medibank Private Ltd 3.635 2% 2,453,531 $9,831,791,567 QBE QBE Insurance Group 14.91 1% 1,960,775 $21,945,615,904 LSF L1 Long Short Fund 2.97 1% 253,843 $1,815,011,172 EBO Ebos Group Ltd 33.55 1% 31,342 $6,349,137,040 NHF NIB Holdings Limited 7.47 1% 231,342 $3,573,962,452 AMC Amcor PLC 14.32 1% 1,791,371 $9,077,570,132 SIQ Smart Group Corporation 8.7 1% 256,243 $1,143,723,720 SUN Suncorp Group Ltd 13.86 1% 883,814 $17,440,707,063 ZIM Zimplats Holding Ltd 21.93 1% 8,326 $2,338,966,113 AUI Australian United In 10.12 1% 28,066 $1,268,607,589 IFT Infratil Limited 9.35 1% 65,150 $7,726,227,616 BFL Bsp Financial Group 5.44 1% 10,116 $2,522,987,887

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Suncorp Group (ASX:SUN) rose after providing a rather sunny update on the ongoing weather events that have impacted Queensland, New South Wales, Victoria and the ACT since the end of November, including ex-Tropical Cyclone Jasper.

SUN says while it is too early to provide a total forecast cost of the events given their ongoing nature it expects to be within its natural hazard allowance of $680 million for the half year to December 2023. The natural hazard allowance for FY24 is $1,360 million.

Australia’s largest alcohol retailer Endeavour Group (ASX:EDV) is looking to put unpleasantries of 2023 behind after announcing the departure of under-seige chairman Peter Hearl.

Board director Bruce Mathieson Jr will also step down in a board restructure, which is hoped to put the BWS and Dan Murphy’s owner on a smoother path for 2024.

The departure of Mathieson Jr comes after a public battle before last year’s AGM that saw his father Bruce Mathieson Sr support another candidate for the board and launch a verbal attack on EDV CEO Steve Donohue and Mr Hearl.

The Mathieson family remains the largest shareholder in EDV.

BIG CAP LOSERS

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Code Name Price % Change Volume Market Cap GOR Gold Road Res Ltd 1.79 -8% 7,123,150 $2,113,748,424 SQ2 Block 105.83 -7% 151,380 $3,994,160,769 BGL Bellevue Gold Ltd 1.5575 -6% 3,535,560 $1,901,604,212 CTT Cettire 2.76 -5% 1,537,772 $1,113,215,602 HLS Healius 1.57 -5% 890,803 $1,205,271,291 WAF West African Res Ltd 0.93 -5% 1,098,462 $1,005,590,815 CNI Centuria Capital 1.665 -4% 302,765 $1,400,826,548 SLR Silver Lake Resource 1.1575 -4% 2,214,590 $1,126,366,921 SLX Silex Systems 4.17 -4% 315,808 $1,024,005,966

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Shares Block Inc (ASX:SQ2), which acquired Afterpay in January 2022, fell on Wednesday following a sell-off of the dual NYSE-listed buy now, pay later (BNPL) stock in New York overnight.

SQ2 closed down 6.6% on the NYSE overnight following as mentioned a larger sell-off in the US tech sector.

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