The ASX is set to start in the red as a Facebook outage leads to a tech stock crunch on Wall St.
Apple, Facebook, Microsoft, Alphabet and Amazon all dropped between 2.4% and 5.8% in overnight trading, as the tech sector punished Wall St.
With US markets down, the ASX is expected to follow suit.
Part of the blame for the tech sectors overnight demise could be put down to the collapse of the Facebook, Instagram and WhatsApp platforms, which were offline for more than six hours.
The massive outage has impacted tens of millions of users across all platforms.
"*Sincere* apologies to everyone impacted by outages of Facebook powered services right now," Facebook chief technology officer Mike Schroepfer posted on Twitter.
The outage could be a boon for rival platforms.
“Signups are way up on Signal (welcome everyone!),” the messaging app, wrote on Twitter.
A cybersecurity issue is yet to be ruled out, however, it is more likely to be a DNS registration issue.
Faecbook shares were down over 5%. Panicked stockholders sold hard, causing a US$7 billion (A$9.6 billion) loss for founder Mark Zuckerberg who slipped out of the top three richest people in the world to now only be number five, with a net worth of A$164 billion.
The Evergrande crisis also continues. Trading has been halted on the Hong Kong market in China Evergrande shares, with speculation it could sell some of its property unit to Hopson Group.
In positive news for energy investors, oil prices hit a seven-year high yesterday.
Brent crude improved by 1.2% to $US79.28 a barrel and US oil gained 1.1% to $US75.88 a barrel.
Here’s what we saw:
- The Aussie dollar lifted from lows near US72.51 cents to highs near US73.03 cents and was near US72.90 cents at the US close.
- Global oil prices rose by around 2.5% on Monday. Commsec’s Craig James says, “OPEC+ ministers ratified the 400,000 barrel-a-day output increase each month until at least April 2022. Saudi Aramco said the global natural gas shortage has boosted crude consumption by 500,000 barrels a day.”
- The Brent crude price rose by US$1.98 or 2.5% to US$81.26 a barrel.
- The US Nymex crude price rose by US$1.74 or 2.3% to US$77.62 a barrel, the highest level since 2014.
- Base metal prices were mostly higher on Monday. China's efforts to rein in a burgeoning energy crisis continued to dominate the supply and demand outlook.
- Aluminium rose by 2.1%.
- Nickel fell by 0.3%.
- The gold futures price rose by US$9.20 an ounce or 0.5% to U$1,767.60 an ounce.
- Spot gold was trading near US$1,767 an ounce at the US close.
- Iron ore lifted by US80 cents a tonne or 0.7% to US$117.80 a tonne on expectations steel mills will resume operations after this week's holiday in China.
Australian markets
The S&P/ASX 200 gained 1.3% to close at 7278.5 points, with the financial sector outperforming and healthcare dragging.
However, it is likely losses will be the talk of the morning following Wall Street’s dive overnight.
The other talk of the day will be who takes over from Gladys Berejiklian as NSW Premier. Treasurer Dominic Perrottet is in the box seat, however, Rob Stokes has also put his hat in the ring.
It is unlikely Stokes has the numbers, however, he told 2GB’s Ben Fordham he wanted to give MPs choice.
"We live in a democracy, we don't live in North Korea," he said.
Meanwhile, Victoria is not only the most locked-down city in the world, but cases also continue to spike with 1,763 new cases overnight – the highest number in the state through the entire pandemic.
Australian indices
- ASX 200 rose 1.29%% to 7,278.50.
- ASX24 futures fell 0.9% to 7,176.
- S&P/ASX Small Ordinaries rose 0.55% to 3,438.60.
- All Ordinaries rose 1.20%% to 7,576.80.
US markets
As stated, US markets were brought down by tech stocks overnight.
The sell-off in technology shares resumed amid the threat of persistently high inflation.
Sentiment was also dented after US President Joe Biden said he cannot guarantee the US government will not breach its US$28.4 trillion debt limit unless Republicans join Democrats in voting to raise it.
On the brighter side, Tesla shares rose by 0.8% after the electric vehicle maker reported record quarterly deliveries that beat estimates.
US indices
- Dow Jones fell 0.9% to 34,002.92.
- S&P 500 dropped 1.3% to 4,300.46.
- Nasdaq fell 2.1% to 14,255.49.
European markets
Europe’s markets were also down on Monday, with the STOXX 600 posting close to 11-year lows.
Dragging the market down was shares of gambling company Kindred Group, which fell by 8.2% to the bottom of the STOXX 600 index after broker Carnegie downgraded the stock.
In London trade, shares in Rio Tinto rose by 0.1% and shares in BHP lifted by 0.3%.
European indices
- STOXX 600 fell 0.5% to 450.77.
- German Dax fell 0.8% to 15,036.55.
- UK FTSE fell 0.2% to 7,011.01.