Australia's share market was weaker in morning trading, dragged down by Afterpay Ltd (ASX:APT)’s 7.3% loss.
The big miners also fell with BHP, RIO and FMG down 0.8-1.4%.
Macquarie underperformed by 0.9%, while the Big Four banks suffered.
Qantas had a shocker, diving 3% after slashing capacity due to COVID-19.
The S&P/ASX200 had dropped 70.20 points or 0.94% to 7,404.20 at time of writing. The index has lost 0.66% for the last five days, but sits 2.99% below its 52-week high.
The bottom performing stocks in this index so far are Pendal Group Ltd, down 9.26%, and the aforementioned Afterpay.
Pendal Group’s funds under management fell by 2.5% to $135.7 billion during the fourth quarter, weighed heavily by a 6.8% fall in net flows.
“It has undoubtedly been a disappointing quarter in terms of our flows. However, we are responding with a clear set of actions and have delivered strong performance fees in line with those recorded in the prior year,” said Pendal chief executive Nick Good.
“Pendal continues to invest in distribution in key target markets, is working closely with fund managers to strengthen investment performance, and has launched new impact and thematic products that are quickly gaining traction and meeting the changing needs of clients. We remain committed to bringing investment excellence to our clients over the full market cycle.”
The rise of Meta Platforms
The popularity of Meta Platforms (formerly known as simply Facebook) among global DIY investors has soared.
Meta Platforms repositioned itself from a company best known for Facebook as a leader in the emerging metaverse sector, a connected virtual reality world that has been tipped to revolutionise the way we shop, work and socialise.
Data from global investment platform eToro shows that Meta rocketed from 13th place in quarter three to sixth in the last quarter of 2021 in terms of popularity.
This sentiment was also mirrored by Australian eToro investors, as Meta jumped from 11th place in quarter three to sixth in quarter four of 2021.
“Meta Platforms’ growing popularity with investors might be slightly surprising considering it lagged the market in the fourth quarter. However, there are a number of reasons why more DIY investors are holding the stock,” eToro Global Markets Strategist Ben Laidler said.
“Firstly, at 23 times 2022 consensus earnings, it is the cheapest of all the major US tech stocks, with a valuation nearly in-line with the overall S&P500, looking at price-to-earnings.
“Secondly, the firm has ditched the Facebook moniker and hitched its wagon to the fledgling metaverse sector, which is starting to cause real excitement among many investors.
“The metaverse is a huge growth opportunity and the fact Meta has thrown its brand and resources behind it will be a big catalyst for its development. And while it is not the only company exploring this area, it will no doubt be one of the major players.”
Growth companies remain highly popular with investors and dominate eToro’s top 10 list of most-held stocks, despite fears over rising inflation and higher interest rates.
Electric vehicle company Tesla Inc (NASDAQ:TSLA) remained in pole position as the most held global stock on eToro’s platform at the end of quarter four, with Chinese rival Nio in second place.
In Australia, Tesla took the first place on the list and Nio remained in the third position.
Tech juggernauts Amazon (third most held in quarter four), Apple (fourth), Alibaba (fifth), Microsoft (eighth) and Google-parent Alphabet (ninth) all held onto their positions in the top 10 at the end of quarter four.
In Australia, Apple was the second on the list, followed by GameStop Corp (NYSE:GME) (fourth), Amazon (fifth), Alibaba (sixth), Microsoft (eighth), Google-parent Alphabet (ninth) and Palantir Technologies Inc in 10th position.
“What’s interesting from Australian investors is that they continue to approach investing with a long-term mindset. Stocks such as Tesla and Nio are companies they believe will thrive over the next decade. Investors are not getting caught up in short term price movements, but instead looking ahead and focusing on future growth,” eToro’s Australian market analyst, Josh Gilbert said.
“With Apple featuring second on the list, it also demonstrates to us that Australian investors are confident in the growth of Big Tech moving forward. Australian eToro investors are choosing to invest in stocks that they know, love and use in their everyday lives. Apple, Amazon, Meta and Alphabet are clear examples of this.”
The best and worst performing sectors this week
The best performing sectors are Energy and Materials, both up more than 5%, followed by Utilities up more than 3%. The worst performing sectors include Consumer Staples down more than 3%, followed by Consumer Discretionary down more than 2% and Industrials down more than 1%.
The best performers in the S&P/ASX top 100 stocks include AGL up more than 15%, followed by Woodside 9% higher while Mineral Resources and South 32 are over 8% higher.
The worst performing stocks include Reece Pharmaceuticals, down more than 8%, followed by Sonic Healthcare and Domino’s Pizza, both down more than 7% and Charter Hall Group (ASX:CHC), down more than 6%
What's next for the Australian share market?
Wealth Within founder and analyst Dale Gillham is back to let us know hs throughts on the market moving forward.
"It is four weeks since I wrote my last report and it has certainly been an interesting time, as the All Ordinaries Index rose around 4% over that time to a new all-time high of 7,956 points on January 5, 2022.
"That said, the gain was pretty much eroded the next day when the market fell heavily, which indicates it is not as bullish as we might like to think.
"Looking at the market on a daily basis is not a good idea and why I advocate that you need to look longer term to understand the bigger picture.
"For example, the highest weekly close on the All Ordinaries Index is still the week of August 13 2021 at 7,897 points. Further our market has failed to close above 7,826 points in the last 19 weeks, so investors need to be careful because while the market may appear to be bullish, it is not strongly bullish.
"Therefore, I would encourage everyone to exercise caution when selecting stocks."
On the small cap front
Alice Queen Ltd (ASX:AQX) is up 11.11% on the back of positive assay results from the recent RC drill program designed to test the profile of the legacy mining stockpiles at its Horn Island Project, located in the Torres Strait, Queensland.
AVZ Minerals Ltd (ASX:AVZ) is 2.17% higher. AVZ is now trading on the OTCQX Best Market under the ticker ‘AZZVF’, taking advantage of the growing opportunities for the global lithium sector, particularly in the North American market.