SYDNEY, AAP – Investors rushed for technology shares on a mixed Australian market, but an analyst warned of big changes facing tech investors.
Afterpay shares rose a little more than five per cent on Wednesday and led technology higher, while the major categories of financials and materials were little changed and slightly lower.
US investors earlier saw value in technology stocks. They raised the Nasdaq 2.4 per cent after recent selling inspired by rate-hike expectations and mounting coronavirus infections.
ThinkMarkets analyst Carl Capolingua said while share categories across the ASX ranged in value, technology was easily the most expensive.
“These stocks carry high price-to-earnings ratios and are vulnerable to big market moves,” he said.
“If money is sucked out of the market, they are over-valued.”
The ASX technology index has slumped since November when central banks, particularly the US Federal Reserve, flagged economic stimulus would soon need to be eased.
Mr Capolingua said the change in central bank rhetoric had strong implications for technology shares.
“Instability has come into the tech sector,” he said.
“Things are only going to skew more towards interest rates normalising.”
The benchmark S&P/ASX200 index closed up 9.8 points, or 0.13 per cent, to 7364.8 points on Wednesday.
The All Ordinaries closed higher by 15.9 points, or 0.21 per cent, to 7682.6 points.
Miners BHP and Rio Tinto were making acquisition news for different reasons.
BHP will not match an offer for Canadian miner Noront Resources from the Andrew Forrest-backed Wyloo Metals.
The Noront board said the Wyloo offer of $C1.10 ($A1.19) was superior.
BHP shares were lower by 0.77 per cent to $41.39.
Rio Tinto, meanwhile, is buying the Rincon lithium project in Argentina which could produce battery-grade lithium carbonate.
The miner will pay $825 million to private equity group Sentient Equity Partners.
Shares were down about two per cent to $99.35.
Iron ore specialist Fortescue declined 1.77 per cent to $19.44.
Financial technology provider Link Group received a $3 billion takeover offer from rival Dye & Durham.
The Link board has urged investors to accept the offer, which will pay $5.68 per share including the interim dividend.
Trading in the shares paused before the news but later resumed and they closed higher by 15 per cent to $5.51.
Engineering group CIMIC is part of a joint venture which has won a $1.8 billion contract for the Western Sydney Airport.
Subsidiary CPB Contractors and Ghella will design and dig tunnels for the train line to the airport.
Shares were down 0.3 per cent to $16.46.
Financial technology provider Praemium has sold its international business to investment researcher Morningstar for $65.1 million.
Praemium said its operations in Dubai, Hong Kong, the UK and the US state of New Jersey had been at a scale disadvantage to competitors.
Some sale funds will go to investors and a dividend policy will be introduced for the 2023 financial year.
Shares were up 2.13 per cent to $1.44.
The Australian dollar was buying 71.32 US cents at 1729 AEDT, higher from 71.13 US cents at Tuesday’s close.
ON THE ASX
* The benchmark S&P/ASX200 index closed up 9.8 points, or 0.13 per cent, to 7364.8 points on Wednesday.
* The All Ordinaries closed higher by 15.9 points, or 0.21 per cent, to 7682.6 points.
* At 1729 AEDT, the SPI200 futures index was up five points, or 0.07 per cent, to 7276 points.
One Australian dollar buys:
* 71.32 US cents, from 71.13 cents on Tuesday
* 81.40 Japanese yen, from 80.97 yen
* 63.26 Euro cents, from 63.12 cents
* 53.81 British pence, from 53.87 pence
* 105.73 NZ cents, from 105.80 cents.