The ASX finished lower today, dragged down by Energy (-1.30%, Consumer Discretionary (-1.61%), Health Care (-0.17%), Financials (0.57%), Information Technology (-3.42%) and Communication Services (-0.45%).
The S&P/ASX200 dropped 47.30 points or 0.63% to 7,442.80. The index has lost 0.76% for the last five days, but is virtually unchanged over the last year to date.
The bottom performing stocks in this index were Liontown Resources (ASX:LTR) Ltd down 6.40% and Imugene Ltd (ASX:IMU, OTC:IUGNF) down 6.25%, both without news for the day.
Tech heads
While it would seem tech stocks have taken a battering this year, do it yourself investors have been loading up.
The tech sector has been one of the hardest hit in 2022, however, data from eToro reveals that nine of the 10 most held stocks by its global users at the end of the first quarter were tech stocks.
Of the top 10 stocks, only video retailer GameStop stood outside the tech sphere.
GameStop’s shares rallied more than 40% over the past month and received a further boost last week after it announced a stock split. In Australia, this sentiment was mirrored.
“Tech stocks have been among the hardest hit in 2022, with the Nasdaq in correction territory and several big names significantly underwater. There are multiple reasons for that. The obvious being the war in Ukraine, which has knocked sentiment across the board. But perhaps more relevant to the tech sector is the fact that major economies – and the US in particular – have started increasing interest rates for the first time in years,” eToro’s Global Markets Strategist, Ben Laidler, says.
“High inflation and rising interest rates tend to hit tech stocks harder than other sectors because their valuations are based on future rather than present earnings. The problem is that in a high inflation/rising interest rate environment, those future earnings are worth less and, theoretically speaking, make the sector less attractive.”
Maintianing top spot from last, were electric vehicle makers Tesla and Chinese rival Nio, indicating investors see the long-term potential of the sector. The number of investors holding Tesla increased 12% between Q4 2021 and Q1 2022, while there was a 6% increase in the number of investors holding Nio over this time period.
Amazon (+13 per cent Quarter-on-Quarter) and Apple (+12 per cent QoQ) held onto third and fourth place, respectively, despite both their share prices falling around 2 per cent since the start of the year.
Facebook parent Meta Platforms (+48 per cent QoQ) jumped one place to become the fifth most-held stock on the eToro platform, despite its shares slumping more than 33 per cent over the past three months.
Alibaba (+9 per cent QoQ), Microsoft (+27 per cent QoQ), chip maker NVIDIA (+27 per cent QoQ), Google parent Alphabet (+13 per cent QoQ) and GameStop (-3 per cent QoQ) rounded off the top 10.
In Australia, the top 10 most held stocks included Tesla (+12 per cent QoQ), Apple (+9 per cent QoQ), Nio (+3 per cent QoQ), Amazon (+13 per cent QoQ), Meta Platforms (+42 per cent QoQ), GameStop (-4 per cent QoQ), Microsoft (+21 per cent QoQ), Alibaba (+6 per cent QoQ), NVIDIA (+23 per cent QoQ), and Alphabet (+13 per cent QoQ).
“The growth of open positions for tech stocks during the difficult trading period that was Q1 2022 suggests investors are making the most of the current market volatility and looking to ‘buy the dip’ to add to long term positions at a low price point,” Laidler adds.
“While the sector has wobbled of late, the fact the tech-heavy NASDAQ index has rallied more than 12 per cent since the middle of March suggests the recent correction could be short-lived.
“Of course, it is very difficult to be sure that is the case given the uncertain economic backdrop. If the situation in Russia escalates, or central banks increase rates faster than expected, then this could have negative ramifications for all stocks, including those in the tech sector.
“However, many investors are clearly ignoring short-term macro factors and are investing in tech because of the long-term opportunity.”
Josh Gilbert, Australian market analyst said: “Australian investors are sticking to what they know when it comes to investing in US stocks. Names such as Microsoft, Tesla, and Meta Platforms solidify that investors aren’t trying to find a needle in a haystack with their investments.
“In particular, Apple and Amazon are also outperforming the benchmark of the S&P 500 this year. These stocks are standing up as all-weather equities that offer investors stability in what has been a tough start to 2022 for the tech sector,” concluded Josh.
On the small cap front
- Openn Negotiation Ltd finished 21.95% higher
- Okapi Resources Ltd finished 21.67% higher
- Stellar Resources Ltd finished 3.70% higher
- Adalta Ltd finished 2.74% higher
- Nickelsearch Ltd finished 2.50% higher
- Ora Banda Mining Ltd finished 2.08% higher
- Golden Rim Resources Ltd finished 1.45% higher
- FAR Ltd finished 1.36% higher
- Red 5 Limited finished 1.35% higher
- Elementos Limited finished 1.19% higher