Evening Wrap: ASX 200 ends sharply lower, tech stocks tumble, Bank of England set to hike

All 11 ASX sectors finished in the red, led by tech and real estate stocks. Defensive sectors and energy managed to outperform, Johns Lyng shares tumble on an earnings downgrade, the Bank of England is set to hike rates by another 25 bps and Powell will speak again before the House of Financial Services.

Let's dive in.

ASX 200 Session Chart

ASX 200 tumbles and finishes at worst levels (Source: Market Index)

Markets

The ASX 200 tumbled and closed around session lows. This isn't the kind of desirable price action you want to see after an eight day winning streak. If you look at how the market's performed over the past couple of months, this is where it needs to bounce quickly or runs the risk of further distribution and downside.

The session somewhat resembled what happened on Wall Street, where recent gainers led to the downside, notably tech. While defensive sectors and energy outperformed on a relative basis. It will be interesting to see if this rotation and mean reversion theme continues over the next few days.

Economy

No major economic updates on Thursday. The Bank of England is expected to hike interest rates by another 25 bps to 4.75%. However, would the scotching hot UK inflation print earlier this week (headline inflation was unchanged at 8.7% year-on-year in May and core inflation accelerated to 7.1% from 6.8% in April) put 50 bps on the table?

Latest news

Interesting news and movers

Trading higher

• +60.3% Eroad (ERD) – Receives acquisition proposal

• +14.3% Stavely Minerals (SVY) – Drill plan update

• +12.3% Regional Express (REX) – Consolidation bounce

• +11.3% Fleetwood (FWD) – Agreement with Rio Tinto

• +5.0% Panoramic Resources (PAN)

• +4.4% Byron Energy (BYE) – Business update

• +2.1% Adriatic Metals (ADT)

• +1.8% Telix Pharma (TLX)

Trading lower

• -11.9% Johns Lyng (JLG) - Earnings downgrade

• -8.3% Gold Road Resources (GOR) – Production downgrade

• -8.1% DGL Group (DGL) – Continuation selloff

• -7.0% Hastings Tech (HAS) 

• Gold sector move: Ramelius (-6.9%), West Gold (-3.6%), Perseus Mining (-3.5%), Northern Star (-3.2%), Newcrest (-1.3%)

• Tech sector move: Megaport (-7.6%), Technology One (-4.4%), Xero (-4.3%), Wisetech (-4.1%), Altium (-4.0%), Codan (-3.4%)

• Real Estate sector move: Lendlease (-3.8%), Vicinity (-3.4%), Dexus (-3.3%), Stockland (-3.1%), Scentre Group (-2.6%), Mirvac (-2.2%)

Broker notes

The broker notes segment is taking a break today.

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