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Tech stocks tumbling to fresh lows

mining ore

The S&P/ASX 200 has lost more than 1.50% to an intraday low of 7,108.80, on Tuesday and closed down 1% at 7,161.30, as tech stocks weighed on the index. Dow futures were down more than 500 points at one point during the session and other US futures markets are sinking as tension builds over Russia’s move on Ukraine.

In Hong Kong, Chinese technology stocks dropped for a third straight session amid fresh worries over Beijing’s regulatory plans for the sector. Alibaba is leading shares lower there.

Bloomberg is reporting that HSBC Holdings Plc boosted its plans to return billions of dollars to investors, saying that business is picking up as global economies recover from the pandemic. The London-based bank will initiate a share buyback of as much as $US1 billion, on top of an earlier $US2 billion program, it said in an earnings statement on Tuesday. The lender posted a 79% increase in adjusted pretax profit to about $US4 billion in the fourth quarter, compared with company-compiled estimates of $US4.09 billion.  

Mining giant Rio Tinto (AU: RIO) is scheduled to report full year earnings on Wednesday 23 February.

On 18 January, Rio Tinto narrowly beat the bottom end of its revised iron ore shipment guidance for 2021. Its full year production review confirmed an additional $US175m blowout at its Oyu Tolgoi copper mine expansion in Mongolia. It said its January 2023 deadline for first productions was under revision.

The company warned about ongoing skilled worker shortages and broader supply chain issues, something analysts from UBS and Citi were warning about back in July after Rio Tinto shares hit record highs on the back of its record $12.4bn interim dividend splash.

Rio booked an after-tax profit of $US12.3bn for the first half, on free cash flow of $US10.2bn from its global operations after record iron ore prices lifted revenue. High-grade 65% iron ore has fallen from a record high above $US200 a tonne last May to trade closer to $US140 a tonne.

CMC Markets data shows there are 8 Buy recommendations on Rio, 7 Hold and 2 Sell ratings.

The next RBNZ policy meeting is scheduled for 23 February. A 25-basis point increase in the OCR might not be enough to lift the NZD as it is already widely expected. At the same time, the markets have priced in a 50-bps increase by the US Federal Reserve in March, which could press on the Kiwi dollar.  

The Aussie dollar is at US71.87c against the US dollar.

Bitcoin is at $US36,513.

Gold is stronger at $US1909.15 an ounce.

Brent crude oil is around $US96.54 a barrel.

WTI crude oil is at $US94.26 a barrel.


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