Category: Stock Market

In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to end the week with a solid gain. At the time of writing, the benchmark index is up 0.6% to 7,471.6 points.

Four ASX shares that have failed to follow the market higher today are listed below. Here’s why they are tumbling:

Afterpay Ltd (ASX: APT)

The Afterpay share price is down 4.5% to $118.71. Investors have been selling this payments company’s shares following a pullback in the Square share price overnight. The US payments giant’s shares were sold off after its third quarter result fell short of expectations. As Square is acquiring Afterpay in an all-scrip deal, the value of the takeover rises and falls with its share price.

Clinuvel Pharmaceuticals Limited (ASX: CUV)

The Clinuvel share price is tumbling 10.5% to $36.36. This decline appears to have been driven by the release of a broker note out of Jefferies this morning. According to the note, following some strong gains in recent months, the broker has downgraded this biopharmaceutical company’s shares to a hold rating from buy. The Clinuvel share price is still up over 50% in 2021.

Inghams Group Ltd (ASX: ING)

The Inghams share price is down a further 3.5% to $3.47. Investors have been selling this poultry producer’s shares since the release of its annual general meeting update on Thursday. That update revealed that Inghams’ performance is being impacted by sustained input cost pressures. In response, this morning Macquarie retained its neutral rating but cut its price target down to $3.70.

Virgin Money UK (ASX: VUK)

The Virgin Money share price has sunk 11.5% to $3.14. This UK based bank’s shares are being sold off today following the release of its full year update. Virgin Money advised that it expects to record an underlying profit before tax of 801 million pounds. This will be up 546% from the 124 million pounds recorded a year earlier. However, taking the shine off this was management revealing that it will incur 275 million pounds in restructuring costs over the next three years. This was approximately double what the market was expecting.

The post Why Afterpay, Clinuvel, Inghams, and Virgin Money UK shares are tumbling appeared first on The Motley Fool Australia.

More reading

• Why is the Virgin Money UK (ASX:VUK) share price down 11% today?
• Which tech shares are dragging down the ASX 200 on Friday?
• ASX 200 (ASX:XJO) midday update: REA and News Corp impress, Link receives takeover offer
• Expert highlights big threat to the Zip (ASX:Z1P) share price
• Own ASX BNPL shares? These were the best performers during October

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Pure Hydrogen Corporation CDI (ASX: PH2) share price is surging today following an update on its H2X Global transaction.

During mid-afternoon trade, the energy company’s shares are up 8.60% to a multi-year high of 50.5 cents.

What did Pure Hydrogen announce?

Investors are pushing Pure Hydrogen shares higher on news of the company’s positive release.

In a statement to the ASX, Pure Hydrogen advised that it has completed the transaction of H2X. This means that the company now holds a 24% interest in H2X Global with options to increase its ownership to 48%.

H2X is a hydrogen-powered vehicle manufacturer that is currently building Australia’s first hydrogen fuel cell cars. The company aims to market everything from all-electric utes, SUVs, vans and minibuses.

In addition to the update, H2X signed a memorandum of understanding (MoU) with the Economic Development Corporation (SEDC). The latter is an arm of the State Government of Sarawak, Malaysia.

Under the framework, H2X will establish a joint venture with SEDC Energy to produce long haul vehicles. However, in the near-term it will begin with assembly of utes to city buses, and also H2X hydrogen powered generators.

This follows the decision by the Sarawak government which first introduced hydrogen powered vehicles in 2019. The agreement could further lead to H2X supplying and assembling more vehicles including buses to meet the growing demand.

H2X CEO, Brendan Norman commented:

Sarawak was already well ahead of most States in the region and was well advanced establishing long term hydrogen production for both domestic and export markets.

We are been honoured to be selected to work with SEDC. It is likely that Sarawak will not only produce vehicles for its own use but will become a major supplier to other States in Malaysia and countries in the region.

Pure Hydrogen share price summary

Since the beginning of 2021, Pure Hydrogen shares have taken off, accelerating by more than 470%. When zooming out to the last 12 months, its shares have further accelerated to a gain of 515%.

Pure Hydrogen presides a market capitalisation of around $158.5 million, with more than 313.8 million shares on hand.

The post Why the Pure Hydrogen (ASX:PH2) share price is leaping to a multi-year high today appeared first on The Motley Fool Australia.

More reading

• Pure Hydrogen (ASX:PH2) share price jumps 5% on hydrogen vehicle plans
• Why are ASX hydrogen shares in the spotlight on Monday?

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Both domestic and international travel is back on the cards for millions of Australians. So why is the Webjet Limited (ASX: WEB) share price struggling compared to that of its business-focused peer, Corporate Travel Management Ltd (ASX: CTD)?

Despite plenty of positive news regarding the Australian travel sector, the Webjet share price has fallen 4.3% over the past month. Shares in the online travel agent are currently trading for $6.33 apiece.

That’s a notably worse performance than that of the Corporate Travel share price. It has gained 0.5% in the same time frame to reach $24.60.

Though, both are underperforming against the broader market. The S&P/ASX 200 Index (ASX: XJO) has gained 3% over the last month.

Australia’s return to travel

On Monday, international borders reopened in Victoria and New South Wales after both states agreed to scrap quarantine for fully vaccinated arrivals. Additionally, residents eager to head overseas once more have been given the green light to do so.

And in more good news for wandering Aussies, travel between Victoria, New South Wales, and the ACT resumed today.

Though, the news hasn’t been enough to boost the Webjet share price back into the green.

What’s weighing on the Webjet share price?

There’s no news on which to pin the recent poor performance of the Webjet share price compared to that of Corporate Travel.

It could be due to the market believing business travel will restart quicker than leisure travel. Though, that doesn’t take into account the online travel agent’s business-to-business branch, WebBeds, which services the travel industry.

Additionally, Webjet has previously predicted it will be turning a profit at the same time as Corporate Travel.

At Webjet’s annual general meeting, the company’s managing director said the business is expected to be cash-flow positive in the first half of financial year 2022.

Whereas, Corporate Travel recently predicted it will return to profitability in the final quarter of the 2021 calendar year.

Unfortunately, there’s no clear answer as to why the Webjet share price is underperforming that of Corporate Travel.

But, at least Webjet’s stock isn’t alone in its struggles. Plenty of ASX travel shares are battling to get back into the green.

The Qantas Airways Limited (ASX: QAN) share price has fallen 2.1% over the last month, while that of Flight Centre Travel Group Ltd (ASX:  FLT) has slumped 17.6%.

The post Why is the Webjet (ASX:WEB) share price underperforming Corporate Travel lately? appeared first on The Motley Fool Australia.

More reading

• These are the 10 most shorted ASX shares
• Why has October been such a lousy month for the Webjet (ASX:WEB) share price?
• Brokers name 3 ASX shares to buy today
• Corporate Travel (ASX:CTD) share price gains as dividends flagged to return
• When was the worst ever day on the Webjet (ASX:WEB) share price chart?

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited and Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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It has been another busy week for Australia’s top brokers. This has led to the release of a large number of broker notes.

Three broker buy ratings that you might want to know more about are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

AVITA Medical Inc (ASX: AVH)

According to a note out of Bell Potter, its analysts have retained their buy rating and $9.80 price target on this regenerative medicine company’s shares. This follows news that the US Centre for Medicare has approved a new reimbursement code that will provide separate payment for AVITA’s Recell devices used in the outpatient setting. Bell Potter feels this represents an important breakthrough for the company and further validation of the clinical benefit of the Recell technology. It notes that this new code is only granted to devices that offer substantial clinical improvement over the standard of care. The AVITA share price is trading at $5.12 today.

Hipages Group Holdings Ltd (ASX: HPG)

A note out of Goldman Sachs reveals that its analysts have retained their buy rating and lifted their price target on this tradie platform provider’s shares to $4.90. This follows news that the company has acquired a 25% interest in property management technology platform, Bricks + Agent. Goldman notes that this gives Hipages exposure to the A$21 billion Residential and Commercial Property Management channel. Goldman also expects the investment to expand Hipages’ ability to capture a greater share of tradie spend. The Hipages share price is fetching $4.02 on Friday.

Suncorp Group Ltd (ASX: SUN)

Analysts at Citi have upgraded this banking and insurance giant’s shares to a buy rating with a $12.80 price target. The broker notes that Suncorp’s hazards claims have overrun in FY 2022. This has led to the broker downgrading its earnings estimates for the current financial year. However, Citi remains positive on the medium term and believes recent share price weakness has left its shares trading at an attractive level. The Suncorp share price is trading at $11.51 this afternoon.

The post Brokers name 3 ASX shares to buy today appeared first on The Motley Fool Australia.

More reading

• The Avita Medical (ASX:AVH) share price just leapt 16% because of this
• Why CSR, Hipages, NIB, and Paladin Energy shares are racing higher
• Why the Suncorp (ASX:SUN) share price is dropping today
• Why this medical tech ASX share could rocket today
• 3 fantastic ASX growth shares to buy this month

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Avita Medical Limited and Hipages Group Holdings Ltd. The Motley Fool Australia has recommended Avita Medical Limited and Hipages Group Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Lake Resources N.L. (ASX: LKE) share price is on the rise today following the company’s latest positive announcement.

At the time of writing, the clean lithium developer’s shares are flat at $1.01 a pop. But, during early morning trade, its shares reached an all-time high of $1.185.

What did Lake Resources announce?

Lake Resources shares are climbing after the company provided an update on the bonus options and funding facility.

According to its release, Lake Resources advised around 78% of shareholders took up the 1-for-1 additional bonus options. This resulted in 86.1 million new shares being issued to participating shareholders, providing around $30 million for the company.

If listed on the ASX, these options if converted will add a further $64 million to Lake Resources’ coffers by mid-next year.

The company declared that at the end of October it had about $63 million in cash reserves.

Lake Resources managing director, Steve Promnitz stated that the company is progressing its flagship Kachi Lithium Brine Project. It aims to have the final investment decision wrapped up and construction beginning next year.

In addition, the company extended its Controlled Placement Agreement (CPA) with Acuity Capital to 31 January 2023. The funding amount increased to $80 million, giving ample firepower to pursue growth opportunities.

Successful drilling has continued at the Kachi project and Lake Resources plans to upgrade and expand the resource. This will see the site move from Inferred Resources to Measured and Indicated (M&I) Resources.

The term Inferred Resources refers to quantity, grade (quality) and mineral content that is estimated with a low-level of confidence. On the other hand, M&I Resources is a reasonable to high-level of confidence based on enough samples being collected.

If this can be achieved, Kachi would become a significant producer globally. The company would bring high purity lithium carbonate to the market with a low carbon footprint.

About the Lake Resources share price

The Lake Resources share price has been one of the best places to invest in the past year, zooming an incredible 1,940%. While renewed investor sentiment within the battery industry has helped support the share price, the company has been making significant tailwinds.

Based on today’s price, Lake Resources commands a market capitalisation of roughly $1.35 billion, with approximately 1.2 billion shares outstanding.

The post Why the Lake Resources (ASX:LKE) share price hit a record high today appeared first on The Motley Fool Australia.

More reading

• Why the Lake Resources (ASX:LKE) share price surged 10% on Tuesday
• Why ASX lithium shares are surging higher on Tuesday
• ASX lithium shares higher as spot prices mark new all-time high
• Lake Resources (ASX:LKE) share price jumps 19%, charges to an all-time high
• ASX lithium shares mixed on Tuesday as prices surge to all-time highs

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Commonwealth Bank of Australia (ASX: CBA) is handily beating the S&P/ASX 200 Index (ASX: XJO) in afternoon trade. CBA shares are up 0.9% compared to a 0.5% gain for the ASX 200.

Today’s outperformance was mirrored in October.

Last month CBA shares gained 0.3%, closing October at $104.68. The ASX 200 went the other way, losing 0.1% for the month.

What happened with CommBank’s share price in October?

In the middle of the month, the bank held its annual general meeting (AGM).

Addressing CBA shareholders, chairman Catherine Livingstone underlined the $6.2 billion in dividends the bank paid during the 2021 financial year.

And she pointed to the fact that CBA shareholders received another $6 billion from the bank’s off-market share buyback.

Livingstone also highlighted CommBank’s healthy profit margins. “Cash net profit after tax was up 19.8% on the prior year, reflecting an improvement in economic conditions, and the strong operating performance of our core banking businesses,” she said.

CBA shares receive conflicting broker forecasts

ASX investors looking for guidance from brokers received some widely conflicting forecasts for the outlook for CBA shares.

Bell Potter came out with a bullish outlook for CommBank for the full 2022 financial year. Bell Potter’s analysts forecast a 9.6% year-on-year increase in the bank’s full-year cash profit for FY22. The analysts also predict a 16% lift in CBA’s FY22 dividend payout. Bell Potter listed a price target of $118 per share.

On the other side of the coin, Morgans had a very bearish outlook for CommBank, with a price target of $80. At the current price of $109.58 per share, that implies a share price fall of some 27%.

Later in October, Morgan Stanley joined the bearish bandwagon. The broker had a sell rating on CBA shares, with a price target of $90 over the next 12 months.

How have CBA shares performed longer term?

That’s the snapshot for October.

Longer-term, CBA shares are up 57% over the past 12 months, compared to a gain of 22% posted by the ASX 200.

Year-to-date the CommBank share price is up 31%.

The post Own CBA shares? Here’s how the share price performed in October appeared first on The Motley Fool Australia.

More reading

• Brokers name 2 excellent ASX 200 dividend shares to buy
• What these three experts are saying about the CBA crypto service
• ASX 200 (ASX:XJO) midday update: CBA enters crypto market, AMP jumps
• CBA (ASX:CBA) just became the first Aussie bank to offer Bitcoin and crypto services
• Leading brokers name 3 ASX shares to sell today

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The S&P/ASX 200 Index (ASX: XJO) is on form again and on course to end the week on a positive note. In afternoon trade, the benchmark index is up 0.55% to 7,468.5 points.

Four ASX shares that are climbing more than most today are listed below. Here’s why they are storming higher:

Jumbo Interactive Ltd (ASX: JIN)

The Jumbo share price is up 7.5% to $17.10. This appears to have been driven by a broker note out of Morgan Stanley this morning. Its analysts were pleased with the lottery ticket seller’s performance during the first quarter. In response, the broker retained its overweight rating and $18.50 price target.

Link Administration Holdings Ltd (ASX: LNK)

The Link share price has jumped 11% to $4.81. Investors have been buying the administration services company’s shares after it received a takeover approach from Carlyle Group. The private equity firm has made a conditional, non-binding indicative proposal to acquire Link for $5.38 per share. This comprises $3.00 cash per share and a pro rata distribution of Link’s shareholding in PEXA Group Limited (ASX: PXA) valued at $2.38 per share.

News Corp (ASX: NWS)

The News Corp share price has surged 9% higher to $34.62. This follows the release of the media giant’s first quarter update. According to the release, News Corp reported an 18% increase in revenue to US$2.5 billion and a 53% jump in EBITDA to US$410 million during the quarter. One of the drivers of this strong result was its Dow Jones media segment. It recorded its highest quarter of revenue and profitability since acquisition.

REA Group Limited (ASX: REA)

The REA share price is up 5.5% to $176.52. This follows the release of the property listings company’s first quarter update. For the three months ended 30 September, REA delivered a 35% increase in revenue to $264 million and a 25% lift in EBITDA including associates to $158 million. This was driven by growth across all Australian segments, underpinned by an increase in national listings. Management also revealed that the second quarter has started strongly, with national listings up 16% year on year in October.

The post Why Jumbo, Link, News Corp, and REA shares are storming higher appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: REA and News Corp impress, Link receives takeover offer
• Why the Link (ASX:LNK) share price is surging 12% higher today
• News Corp (ASX:NWS) share price in focus as first quarter delivers growth
• Why the Link (ASX:LNK) share price could rocket higher today
• REA Group (ASX:REA) share price on watch after delivering strong Q1 growth

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Jumbo Interactive Limited and Link Administration Holdings Ltd. The Motley Fool Australia owns shares of and has recommended Jumbo Interactive Limited. The Motley Fool Australia has recommended REA Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The ETFS Semiconductor ETF (ASX: SEMI) has performed exceptionally since it was listed a little over two months ago. Since listing, the semiconductor-focused exchange-traded fund (ETF) has delivered a return of 5.3%. In contrast, the S&P/ASX 200 Index (ASX: XJO) fell 0.8% during that time span.

Even more impressive, the ETF has rebounded off a slight dip to climb over 14% in the last month. Such a high monthly return from an investment vehicle that contains 29 holdings is quite an achievement.

So, let’s find out more about this new ETF that is taking the market by storm.

What is the ETFS Semiconductor ETF?

Put simply, the SEMI ETF is an ASX-listed ETF offered by etf Securities that gives investors exposure to 29 companies involved in the production of microchips. This opens up the opportunity to capitalise on advancements in modern computing, artificial intelligence, cloud computing, and electric vehicles.

While the fund is dealing in a high-growth industry, there are no highly speculative microcaps within the ETF. In fact, a criterion for inclusion is a market capitalisation of more than US$1 billion and a minimum average daily trading value of US$1 million over 3 months.

Although the ETF contains 29 holdings, it is heavily weighted towards its largest 10, making up approximately 70% of SEMI ETF’s portfolio. You might recognise some of the names in the fund’s top holdings listed below in order of weighting (largest to smallest):

• ASML Holding NV (AMS: ASML)
• Nvidia Corporation (NASDAQ: NVDA)
• Taiwan Semiconductor Manufacturing Co Ltd (TPE: 2330)
• Intel Corporation (NASDAQ: INTC)
• Broadcom Inc (NASDAQ: AVGO)
• Texas Instruments Inc (NASDAQ: TXN)
• Qualcomm Inc (NASDAQ: QCOM)
• Advanced Micro Devices Inc (NASDAQ: AMD)
• Applied Materials Inc (NASDAQ: AMAT)
• Analog Devices Inc (NASDAQ: ADI)

As you might be able to tell from the holdings above, the ETF is heavily weighted towards companies based in North America. Meanwhile, nearly 20% are companies situated in Asia, with the remainder 12.8% being European companies.

What are the costs of the SEMI ETF?

As with all ETFs, there are costs associated with the management of the fund. The SEMI ETF is no different and currently carries a management fee of 0.57%. In other words, $10,000 invested in this ETF would incur a $57 management fee over a one-year period.

For comparison, the Vanguard MSCI Index International Shares ETF (ASX: VGS) has a management fee of 0.18% per annum. However, this ETF is far broader and larger which allows for it to charge a lower fee. For instance, this particular Vanguard fund has $25.4 billion worth of assets under management (AUM). The SEMI ETF, on the other hand, has only $54.3 million worth of AUM.

The post Why has the ETFS Semiconductor ETF (ASX:SEMI) leapt 14% in a month appeared first on The Motley Fool Australia.

More reading

• 3 high quality ETFs getting ASX investors excited
• Here’s why Vanguard MSCI Index International Shares ETF (ASX:VGS) could be a top passive investment idea
• 2 excellent ETFs for ASX investors
• Why is the Vanguard MSCI Index International Shares ETF (ASX:VGS) underperforming the ASX 200 lately?
• Own ASX ETFs? Why the ATO might be focusing on you

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Vanguard MSCI Index International Shares ETF. The Motley Fool Australia has recommended Vanguard MSCI Index International Shares ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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On Wednesday I looked at three ASX shares brokers have given buy ratings to this week.

Unfortunately, not all shares are in favour with them right now. Three ASX shares that have just been given sell ratings by brokers are listed below. Here’s why these brokers are bearish on them:

Domino’s Pizza Enterprises Ltd (ASX: DMP)

According to a note out of Credit Suisse, its analysts have retained their underperform rating and cut their price target on this pizza chain operator’s shares to $77.73. This follows the release of a trading update which revealed a sudden deterioration in the company’s performance in the Japan market. The broker believes this highlights just how difficult it is to forecast post-COVID sales. In addition, Credit Suisse has concerns over the availability of workers and suspects it could impact the company. The Domino’s share price is trading at $117.34 this afternoon.

Magellan Financial Group Ltd (ASX: MFG)

A note out of UBS reveals that its analysts have retained their sell rating but lifted their price target on this fund manager’s shares slightly to $29.50. This follows the release of Magellan’s latest funds under management update. UBS continues to see risks to fund outflows and pressure on its fees. Particularly given the ongoing underperformance of its global fund. The Magellan share price is fetching $35.19 today.

Paradigm Biopharmaceuticals Ltd (ASX: PAR)

Analysts at Morgans have downgraded this biopharmaceutical company’s shares to a reduce rating with a $1.68 price target. The broker made the move largely on valuation grounds following a strong gain after the company was granted approval by the US FDA to undertake a major knee osteoarthritis major trial. In addition, Morgans has concerns that the trial may have been adjusted unfavourably in respect to marketability to gain approval from the regulator. The Paradigm share price is trading at $2.44 on Friday.

The post Top brokers name 3 ASX shares to sell today appeared first on The Motley Fool Australia.

More reading

• Top broker says Domino’s (ASX:DMP) share price is cheap after selloff
• Why Domino’s, Inghams, Kogan, and Paradigm shares are sinking
• ASX 200 (ASX:XJO) midday update: Zip’s record month, Domino’s crashes
• Why the Domino’s (ASX:DMP) share price is crashing 19% today
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Dominos Pizza Enterprises Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The S&P/ASX 200 Index (ASX: XJO) is kicking off the last trading day of the week today on a positive note. At the time of writing, the ASX 200 is up a healthy 0.62% to 7,473 points. But this rising tide isn’t lifting all boats this Friday. A few ASX tech shares are proving to be a drag on the broader markets today. Let’s check out what’s going on.

Even though the ASX 200 is comfortably in positive territory so far today, a couple of prominent ASX tech shares are struggling and dragging down the broader market.

The Xero Limited (ASX: XRO) share price is one. It’s currently down 0.47% at $152.96 a share. But Afterpay Ltd (ASX: APT) shares are among the worst-performing ASX 200 shares today, with a nasty 3.2% drop thus far to $120.40 a share.

Of course, with an ASX 200 weighting of 1.46% for Afterpay and just 0.94% for Xero, these two companies’ fortunes don’t affect the ASX 200 too much. After all, if the big four banks have a good day, that’s usually enough for the ASX 200 to follow suit. Afterpay and Xero be damned.

But let’s dive into why these two companies are suffering today regardless.

Xero and Afterpay shares weigh on ASX 200

In Afterpay’s case, the answer is probably relatively simple. Ever since Afterpay agreed to be acquired by the US payments giant Square Inc (NYSE: SQ) back in August, this company’s fortunes have been tied to the Square share price.

That’s because Square put up an all-scrip deal. This will see existing Afterpay shareholders receive 0.375 shares of Square for every Afterpay share held. And we saw the Square share price take a bit of a hit overnight (our time) on the US markets.

Square shares fell 1.99% last night to US$247.46 a share. In after-hours trading, the drop was even steeper, with Square losing 3.03% at US$239.96 a share. So it’s perhaps no surprise the Afterpay share price is also taking a hit today, given the intertwined relationship the two companies’ share prices now have.

But in the case of Xero, the answer is less clear on why it’s having a bad hair day this Friday. There is no news or announcements out of the company today. However, one possible explanation is some expert investor opinions. As my Fool colleague Tristan covered earlier this week, one broker isn’t too bullish on Xero right now.

Brokers at Macquarie Group Ltd (ASX: MQG) have recently rated Xero as a ‘sell’, with a 12-month share price target of $130. That implies a potential downside of almost 15% over the next 12 months. Macquarie reckons Xero is facing some fierce competition from its US competitor Intuit Inc (NASDAQ: INTU), which has been accentuated by Intuit’s recent acquisition of Mailchimp.

So the ASX 200 looks like it will finish up the week on a positive note. But even so, it would have been even better without Xero and Afterpay shares weighing it down this Friday.

The post Which tech shares are dragging down the ASX 200 on Friday? appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: REA and News Corp impress, Link receives takeover offer
• Expert highlights big threat to the Zip (ASX:Z1P) share price
• Own ASX BNPL shares? These were the best performers during October
• Afterpay (ASX:APT) share price set to tumble after Square’s shares sink
• Get ready for a 10% share market correction: expert

Motley Fool contributor Sebastian Bowen owns shares of Square. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO, Square, and Xero. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO, Macquarie Group Limited, and Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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