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ASX 200 morning report – ASX tech shares in focus

The S&P/ASX 200 (ASX: XJO) staged a mid-session recovery finishing down just 0.4% on Tuesday after being as far as 1% lower.

ASX tech shares feel the heat

The sell-off was broad-based in terms of sectors with eight of the 11 sectors finishing in the red. But by and large, it was focused on the ASX tech sector which fell 3%.

This followed a sell-off in the likes of Facebook (NASDAQ: FB) and Apple (NASDAQ: AAPL) overnight, with ASX-listed tech facing a bigger problem.

Whilst global tech is seen as ‘expensive’ by many, Aussie tech tends to trade on even higher multiples almost solely due to the lack of other growth options available domestically. Hence the likes of Appen Limited (ASX: APX), down 5%, tend to sell off even more heavily when sentiment turns.

Featured: How to find rapid-growth stocks on 

It remains a ‘cyclical’ versus technology story with the energy sector continuing to rally, Santos Ltd (ASX: STO) up 2.5%, as the oil price hit another three-year high after OPEC+ announced an uninspiring production increase.

RBA halts sell-off

The RBA announced that rates would remain on hold, reiterating their previous position, with no change to the recent tapering of bond purchases.

The Governor highlighted the negative hit to growth in the September quarter but remains confident of a bounce-back in December whilst also predicting we will recover lost ground by the second half of next year.

Gold rallies, Bega lifts

The gold price rallied on a weakening AUD despite the commodity stagnating for several months. Long seen as an inflation hedge, it is more suited as a hedge against volatility.

Meanwhile, shares in Bega Cheese Ltd (ASX: BGA) were 1.3% higher after an analyst suggested it should merge with Fonterra (ASX: FSF) in an effort to extract synergies and effectively buy back its naming rights.

Record trade surplus

Australia achieved another record trade surplus which hit $15 billion in August, overcoming a precipitous fall in the price of iron ore.

Luckily, Australia’s exports of coal, gas and wheat were enough to offset the weakness. Similarly, imports fell likely due to the difficultly faced by many businesses in ordering and taking delivery of stock.

ASX 200 today

Looking ahead, the ASX 200 is expected to open higher on Wednesday after all three US benchmarks pushed higher overnight. To find out more, check out my US stock market report.

The Golden Rules of Investing

We might be experts in retirement, but with combined financial advice experience of 35+ years, we’ve nearly seen it all. 

In mid-2023, our senior team at Wattle Partners Financial Planning put the finishing touches on a brand-new report “The Golden Rules of Investing“.

In this free report, we outline the key principles that determine all of the portfolio construction and investment decisions of Wattle Partners. Collated over decades, this paper should be seen as a work-in-progress, constantly under review in light of the ever-evolving nature of markets. 

You’ll find the free report on my Author page. Simply click the button below to view the Golden Rules.

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At the time of publishing, the author of this article does not have a financial or commercial interest in any of the companies mentioned.

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Wattle Partners is a financial advice firm, servicing clients around Australia, specialising in retirement planning (pre and post retirement). 

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