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The Fortescue Metals Group Ltd (ASX: FMG) share price continues to crater amid weaker iron ore prices and broad-based selling taking place across the S&P/ASX 200 Index (ASX: XJO) on Wednesday.

At the time of writing, Fortescue shares are down 1.11% to $14.705, heading towards their recent 14-month low of $14.15.

Iron ore spot prices falls, futures hold steady

Iron ore prices weakened on Tuesday, sliding US$7.25 a tonne or 6.07% to US$112.06 a tonne.

According to Fastmarkets, market participants have “almost finished pre-holiday restocking and more provinces in China have placed further limits on electricity consumption and steelmaking production”.

The National Day of the People’s Republic of China is a public holiday that runs between 1 to 7 October.

There might be a slither of good news for the Fortescue share price on Wednesday, with Chinese iron ore futures sitting in positive territory.

Benchmark iron ore futures on China’s Dalian Commodity Exchange, for January delivery, is currently trading 1.1% higher to around 685.5 yuan (US$105.98) a tonne.

China’s energy crisis a win for the Fortescue share price

China is currently facing a major power supply crisis with more than half the country enduring power outages and electricity rationing.

This has, in part, been driven by the government’s tough stance on energy consumption and emissions targets.

Domestic and international coal markets are also to blame with prices surging to all-time highs in addition to disruptions in shipping due to COVID-19 and weather conditions.

Analysts at Macquarie Group Ltd (ASX: MQG) have taken a positive spin on China’s power crisis.

As covered by the Motley Fool this morning, Macquarie said:

As current production curtailment has shifted from emission reduction driven to power supply shortage driven, electric arc furnace (EAF) mills have seen a clear drop in their operating rate over past two weeks, helping demand for integrated mills that use iron ore.

Fortescue share price snapshot

The Fortescue share price is down 41% year-to-date, broadly in line with the halving of iron ore prices.

The post Fortescue (ASX:FMG) share price eyes fresh 14-month lows as iron ore prices tumble appeared first on The Motley Fool Australia.

More reading

• How China’s energy crisis could be good for BHP (ASX:BHP) and Rio Tinto (ASX:RIO)
• 2 hot ASX growth shares that this income fund manager favours
• Why the Fortescue (ASX:FMG) share price is down 5% today
• Can Fortescue (ASX:FMG) shares deliver long-term passive income?
• 5 things to watch on the ASX 200 on Tuesday

Motley Fool contributor Kerry Sun 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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The Xero Limited (ASX: XRO) share price is continuing its poor run on Wednesday.

In afternoon trade, the cloud accounting platform provider’s shares are down almost 4% to $135.16.

This latest decline means the Xero share price is now down 10% this week.

Is the Xero share price in the buy zone?

One leading broker is likely to see the weakness in the Xero share price as a buying opportunity.

According to a recent note out of Goldman Sachs, its analysts have a buy rating and $165.00 price target on the company’s shares.

This pullback means there could be 22% upside for the Xero share price over the next 12 months.

Why does Goldman like Xero?

Goldman Sachs is bullish on the Xero share price due to its belief that the company is well-placed for growth over the coming years.

In fact, the broker expects the company’s revenue to double between now and FY 2024. It expects this to be driven by increases in subscriptions, its average revenue per user, and acquisitions.

The broker commented: “We expect XRO revenue to double across FY21-24E (+26% CAGR), driven by: (1) ARPU growth from the recently announced price rises (benefiting FY22/23E) and the introduction of this app store fee (benefiting FY23/24E); (2) Subscriber growth, given accelerating subscriber growth across all geographies in 2H21, and strong recent traction from its Enterprise strategy (i.e. recently signed a Global partnership with DFK, the 7th largest Global Accounting Association, to complement agreements with BDO/RSM); and (3) M&A, with the Planday acquisition to contribute +3% growth in FY22E.”

In addition, Goldman sees a huge opportunity for Xero to monetise its app ecosystem. This follows the recent launch of the Xero App Store.

Its analysts said: “Although the quantum of app attachment rates is uncertain, we estimated that a 15% app store fee could open up an incremental NZ$1.4bn of TAM, with these earnings likely to be 100% margin.”

All in all, the broker believes the Xero share price is good value at this level. Especially given its positive long term growth outlook.

The post The Xero (ASX:XRO) share price is down 10% this week, is it a buy? appeared first on The Motley Fool Australia.

More reading

• Why ASX tech shares are crashing on Wednesday
• The S&P 500 just dropped 2%. Why is this impacting ASX 200 shares?
• Why CSL, Domino’s, Temple & Webster, & Xero shares are tumbling
• Technology shares are dragging the ASX 200 down on Tuesday
• 2 highly rated ASX 200 (ASX:XJO) shares to buy right now

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 Xero. The Motley Fool Australia owns shares of and has recommended 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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The S&P/ASX 300 Index (ASX: XKO) is falling wayside today, continuing its disappointing run from yesterday’s 1.45% loss.

At the time of writing, the ASX 300 is hovering 1.42% lower to 7,146.1 points. This means that the index is now down by more than 4% in a month.

The weak investor sentiment across the market has led to a number of shares in the red. However, let’s first take a look at the biggest gainers on Wednesday.

St Barbara Ltd (ASX: SBM)

The St Barbara share price is roaring 7.09% higher to $1.36 despite no news out of the gold miner today.

Its shares are lifting after the spot price of gold rebounded to US$1,736.07 a tonne at the time of writing. Although the price of the yellow metal has improved 0.15% today, it’s still down 4.4% in September.

Evolution Mining Ltd (ASX: EVN)

Another mover today amid the weakened ASX market is the Evolution share price, up 5.39% to $3.52.

The gold mining company is also on the receiving end of the spot price of gold picking up.

Further, analysts at Morgan Stanley raised their rating on Evolution shares to “equal weight” from the previous “underweight” outlook. The broker, however, cut the price target by 5.1% to $3.70 apiece.

Based on the current share price, this implies an upside of around 5% on Morgan Stanley’s assessment.

Novonix Ltd (ASX: NVX)

The Novonix share price is also pushing ahead, up 3.86% to $7.00.

Investors appear to be bullish on the lithium company’s future prospects as the sector heats up. It is worth noting that the company’s shares were earlier a smidgen off their all-time high of $7.11. That price was reached on Monday.

Novonix shares have accelerated by almost 500% since the start of the year.

Which ASX 300 companies are heading south?

Pinnacle Investment Management Group Ltd (ASX: PNI)

The Pinnacle share price is down a heavy 7.82% to $16.51.

Investors are selling the company’s shares despite the investment company not releasing any market sensitive announcements since its results in early August.

A catalyst for the fall can be attributed to the company’s shares zooming to an all-time high of $18.60 last Friday. It appears investors have decided to take profit off the table following the broader ASX market slump.

PPK Group Ltd (ASX: PPK)

Also being weighed down by investors today is the PPK share price, down 5.59% to $16.77.

The boron nitride nanotubes (BNNT) company spun off its recently listed battery technology company, Li-S Energy (ASX: LIS).

Over the last 5 trading days, PPK shares have lost close to 15%.

The post Which ASX 300 shares are leading the way mid-week? appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: Big four banks fall, Afterpay tumbles
• Why the Novonix (ASX:NVX) share price is climbing among a sea of red on Wednesday
• Why PPK (ASX:PPK) and Li-S Energy are this fund’s largest positions
• Why the Evolution Mining (ASX:EVN) share price is slumping to a 52-week low
• 5 things to watch on the ASX 200 on Wednesday

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. owns shares of and has recommended PINNACLE FPO. The Motley Fool Australia owns shares of and has recommended PINNACLE 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 Qantas Airways Limited (ASX: QAN) share price is in the red today despite no news being released by the airline.

Meanwhile, the Australian Competition and Consumer Commission (ACCC) has found current outbreaks of the COVID-19 Delta variant halted Australian airlines’ recoveries.

The watchdog found one-third of all domestic flights were cancelled in July. That’s the highest cancellation rate on record.

At the time of writing, the Qantas share price is $5.57, 2.96% lower than its previous close.

Qantas stock isn’t alone in its struggles today. The share prices of Flight Centre Travel Group Ltd (ASX: FLT), Webjet Limited (ASX: WEB), and Regional Express Holdings Ltd (ASX: REX) are down 1.77%, 2.02%, and 1.34%, respectively.

The broader market is also in the red. Right now, the S&P/ASX 200 Index (ASX: XJO) and All Ordinaries Index (ASX: XAO) are both down 1.1%.

Let’s take a closer look at the ACCC’s findings.

ACCC report into the airline industry

The Qantas share price is among the many ASX-listed travel companies struggling today.

At the same time, the ACCC has released its latest Airline Competition in Australia report.

The watchdog found Australian domestic capacity, which peaked at 68% of pre-pandemic levels in April, fell to just 23% of normal levels in July. The body expects that figure will have fallen even further over August and September.

The ACCC is also concerned airports might soon increase the fees charged to airlines to make up for some of their losses.

The body commented airports are “effectively unregulated regional monopolies with significant market power.”

ACCC chair Rod Sims commented on the watchdog’s worries:

We would be very concerned if the major Australian airports sought to use their monopoly position to charge airlines excessive prices in order to recover any lost profits from the pandemic. This could limit an already vulnerable sector’s ability to recover, and impact on both consumers and the economy.

But it’s not all bad for Qantas. The ACCC found Qantas used its COVID-induced downtime to expand its regional operations while Rex and Virgin reduced theirs. Though, as Sims said, “passengers on regional routes are less likely to experience the benefits of competition between multiple airlines.”

Finally, the ACCC found the price gap between Virgin and Qantas corporate airfares has doubled since the first half of 2019.

Virgin’s average corporate airfare has decreased to $193 while Qantas’ has increased to $323.    

The body warned the gap could see Qantas cornering more of the premium market. Additionally, that market may continue to see prices increase.

Qantas share price snapshot

While the ACCC has been worrying about how the last few months have affected competition in the airline sector, the Qantas share price has been soaring.

It has gained 21.5% since the start of July, bringing its year-to-date gains to 15.4%.

The post Qantas (ASX:QAN) share price falls amid ACCC report into COVID-19 impacts appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: Big four banks fall, Afterpay tumbles
• The S&P 500 just dropped 2%. Why is this impacting ASX 200 shares?
• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX shares today
• Here are the 3 most traded ASX 200 shares so far this Tuesday

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 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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Exchange-traded funds (ETFs) like the Vanguard Australian Shares Index ETF (ASX: VAS) are growing increasingly popular with investors.

ETFs are a good way to diversify your portfolio without investing thousands of dollars with a fund manager. By buying a portion of the investment, you instantly get access to hundreds, potentially thousands, of shares.

For example, the Betashares Nasdaq 100 ETF (ASX: NDQ) invests in the top 100 shares on the NASDAQ, like Apple Inc (NASDAQ: AAPL), Microsoft Corporation (NASDAQ: MSFT), and Amazon.com, Inc (NASDAQ: AMZN).

The point of an ETF is to as closely as possible match the performance of the index market they are tracking. It’s fair to say that VAS has done that. Over 12 months, the S&P/ASX 200 Index (ASX: XJO) has risen 21.1%. At the same time, VAS is 22.1% higher. Year-to-date tells much the same story. VAS is 9.44% up while the ASX 200 is 7.81% higher.

ETFs also pay a portion of their profits as dividends to investors. For example, Vanguard says it expects its next payout to be $1.41 per share for VAS investors. That represents a 1.5% yield based on the current share price as of writing – $93.45 per share.

Without further ado, here is what VAS is invested in.

What shares does the Vanguard Australian Shares Index ETF own?

Company	Sector	Portfolio percentage (%)
Commonwealth Bank of Australia (ASX: CBA)	Banks	8.10
CSL Limited (ASX: CSL)	Healthcare	6.47
BHP Group Ltd (ASX: BHP)	Resources	6.13
Westpac Banking Corp (ASX: WBC)	Banks	4.32
National Australia Bank Ltd (ASX: NAB)	Banks	4.17
Australia and New Zealand Banking Group Ltd (ASX: ANZ)	Banks	3.61
Wesfarmers Ltd (ASX: WES)	Retail	3.10
Macquarie Group Ltd (ASX: MQG)	Diversified financials	2.58
Woolworths Group Ltd (ASX: WOW)	Consumer staples and discretionary	2.41
Telstra Corporation Ltd (ASX: TLS)	Communications	2.08
Rio Tinto Limited (ASX: RIO)	Resources	1.90
Transurban Group (ASX: TCL)	Transportation	1.77
Goodman Group (ASX: GMG)	Real Estate	1.77
Fortescue Metals Group Limited (ASX: FMG)	Resources	1.59
Afterpay Ltd (ASX: APT)	Buy Now, Pay Later	1.45
Aristocrat Leisure Limited (ASX: ALL)	Consumer staples and discretionary	1.33
Coles Group Ltd (ASX: COL)	Consumer staples and discretionary	1.10
James Hardie Industries plc (ASX: JHX)	Materials	1.07
Sydney Airport Holdings Pty Ltd (ASX: SYD)	Transportation	0.98
Sonic Healthcare Limited (ASX: SHL)	Healthcare	0.95
Newcrest Mining Ltd (ASX: NCM)	Resources	0.92
Woodside Petroleum Limited (ASX: WPL)	Energy	0.85
Xero Limited (ASX: XRO)	Technology	0.84
Brambles Limited (ASX: BXB)	Materials	0.80
QBE Insurance Group Ltd (ASX: QBE)	Diversified financials	0.79
ASX Ltd (ASX: ASX)	Diversified financials	0.78
Suncorp Group Ltd (ASX: SUN)	Diversified financials	0.73
Cochlear Limited (ASX: COH)	Healthcare	0.70
South32 Ltd (ASX: S32)	Resources	0.68
Scentre Group (ASX: SCG)	Real Estate	0.67

The post Own the Vanguard Australian Shares Index ETF (ASX:VAS)? Here’s what you’re invested in appeared first on The Motley Fool Australia.

More reading

• Why is the VAS (ASX:VAS) share price struggling in September?
• August has been a good month for the VAS (ASX:VAS) share price

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Marc Sidarous owns shares of BETANASDAQ ETF UNITS and Westpac Banking Corporation. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO, Amazon, Apple, BETANASDAQ ETF UNITS, CSL Ltd., Cochlear Ltd., Microsoft, and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2022 $1,920 calls on Amazon, long March 2023 $120 calls on Apple, short January 2022 $1,940 calls on Amazon, and short March 2023 $130 calls on Apple. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO, BETANASDAQ ETF UNITS, COLESGROUP DEF SET, Macquarie Group Limited, Telstra Corporation Limited, Wesfarmers Limited, and Xero. The Motley Fool Australia has recommended Amazon, Apple, Cochlear Ltd., and Sonic Healthcare 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) has hit the midpoint of this week in the red and is down 1.13% to 7,193.5 points.

These 3 ASX shares are also struggling today, with each reaching their 52-week lows in early trading.

Read on for more details about each company and what’s behind the falls.

Polynovo Ltd (ASX: PNV)

Shares in Polynovo hit a single-year low of $1.85 this morning, as the medical devices company’s share price continues to swim in a sea of red this year.

Polynovo shares have trended down since January 1 and found themselves 52% in the red this year to date.

This is despite the company posting a 32% year on year increase in revenue for FY21 and management giving strong guidance in all of its markets for FY22.

In addition, the company announced first enrolments in its upcoming funded burn study in the US, known as the BARDA pivotal trial.

Despite these drivers, investors don’t want a bar of Polynovo shares. This ASX share is down ~2% from the open today.

Deterra Royalties Ltd (ASX: DRR)

Another ASX share that hit its 52-week low in early trade today was Dettera Royalties.

This company, which was spun out from Iluka Resources Limited (ASX: ILU) in 2020, focuses on building its portfolio of commodity assets that pay royalties.

Deterra then flows these annuities through to investors via its ~14 cents per share dividend payment.

It had previously been a good year for the company due to its exposure to iron ore, the price of which had jumped to 10-year highs of US$220/tonne in May.

Deterra shares followed suit, reaching the podium in late July for their previous high.

However, iron ore has been on a one-way ticket south since the midpoint of July and now trades at US$117/tonne.

Deterra Royalties share price has been on the same route, albeit departing a week later, having come off a high of $4.86 on 26 July to now trade at $3.36 apiece.

Appen Ltd (ASX: APX)

Appen provides technology data and services in over 180 languages and dialects in 130 countries. However, its share price has been swimming in a sea of red this year.

Appen shares have been on the move down rapidly since the company released its FY21 earnings last month.

Investors immediately punished the company after it recorded a 2% down-step in revenue and a 55% slice out of net profit after tax (NPAT) from FY20.

Yet, the company also announced it completed the acquisition of location data provider Quadrant for US$25 million at around the same time. Perhaps investors were seeking more from Appen.

Appen’s share price has tanked 35% since these updates.

As such its share price has hit a 52-week low this morning and is now changing hands at $8.92 apiece. That’s a 2% dip from the open.

These 3 ASX shares have all underperformed the benchmark lately and have reached new single-year lows today.

The post Why these 3 ASX shares all hit 52-week lows today appeared first on The Motley Fool Australia.

More reading

• The Appen (ASX:APX) share price just hit a 3-year low. Here’s why
• Why has the Polynovo (ASX:PNV) share price tanked 15% in 3 weeks?
• Here’s why the Appen (ASX:APX) share price is down 12% in a month
• 3 ASX shares with bags of potential
• Analysts name 3 stellar ASX growth shares to buy right now

The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Appen Ltd and POLYNOVO FPO. The Motley Fool Australia owns shares of and has recommended Appen 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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Many of Australia’s top brokers have been busy adjusting their financial models again, leading to the release of a large number of broker notes this week.

Three broker buy ratings that have caught my eye are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

A2 Milk Company Ltd (ASX: A2M)

According to a note out of Citi, its analysts have retained their buy rating and $7.20 price target on this infant formula company’s shares. While the broker suspects that there could be more bad news looming, it also believes that any further share price weakness could potentially result in a takeover approach. Citi has also spoken positively recently about a2 Milk’s inventory repositioning and the strength of the brand in China. The A2 Milk share price is fetching $5.97 this afternoon.

Baby Bunting Group Ltd (ASX: BBN)

A note out of Morgan Stanley reveals that its analysts have retained their overweight rating and $6.90 price target on this baby products retailer’s shares. The broker believes that the recent weakness in the Baby Bunting share price is a buying opportunity. This is due to its leadership position in the category and strong demand from consumers for its offering despite the pandemic. It expects a solid update at next week’s annual general meeting. The Baby Bunting share price is trading at $5.49 today.

Domino’s Pizza Enterprises Ltd (ASX: DMP)

Another note out of Citi reveals that its analysts have retained their buy rating and $159.05 price target on this pizza chain operator’s shares. According to the note, the broker has been speaking to industry participants in France and was pleased with what it heard. Overall, the broker believes the French market is a key one for the company and feels positive on its growth plans there. The Domino’s share price is fetching $153.23 this afternoon.

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

More reading

• 2 hot ASX growth shares that this income fund manager favours
• Why CSL, Domino’s, Temple & Webster, & Xero shares are tumbling
• Domino’s (ASX:DMP) share price slips amid management restructure
• Here’s why the A2 Milk (ASX:A2M) share price is rising again today
• ASX 200 (ASX:XJO) midday update: Beach shares jump, a2 Milk rises

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 A2 Milk, Baby Bunting, and 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 Appen Ltd (ASX: APX) share price is continuing its downward trend on Wednesday.

Unfortunately for shareholders, that means the company has hit a milestone that has not been seen since early 2018. At the time of writing, shares in the data annotation company are trading 2.74% lower to $8.87. This means that since the company’s peak in August 2020, the share price has now fallen by more than 78%.

Let’s take a look at what could be impacting the company’s share price today.

Bond yields dunk on ‘riskier’ investments

While the full reasoning behind the prolonged selling pressure in the Appen share price is likely multi-faceted, there are a couple of widespread factors.

Firstly, the market as a whole is experiencing negative sentiment today. The S&P/ASX 200 Index (ASX: XJO) alone is down 1.2%, which is a sizeable single-day decline. This is in line with the 2.04% haircut on US markets overnight, with the S&P 500 Index taking a plunge.

But why are the markets falling?

There are a couple of reasons… treasury bond yields climbed higher overnight and US Federal Reserve chair Jerome Powell received a scathing review.

As bond yields rise investors start to dial down the risk on their investments. This is because if interest rates are to rise, people would be less prone to taking a greater risk with equities when a savings account could provide a reasonable return.

Furthermore, Powell’s less than flattering review by Senator Elizabeth Warren left people concerned over the re-election of the Fed chair. The consequence is reduced predictability of the United States monetary policy. Indeed, uncertainty often results in investors taking some risk off the table.

In the case of the Appen share price, it appears to be a bystander caught in the collateral fallout. Often, investors are more prone to selling down tech names during uncertainty. In turn, the company’s share price performs worse than other ‘blue chip’ shares.

Other weighing factors on the Appen share price

It could also be the case that investors are still negative on the company following its lacklustre FY21 earnings report.

Once commanding a price-to-earnings (P/E) ratio in excess of 50, Appen disappointed its shareholders with a 55.1% fall in net profit after for the year. Evidently, it is difficult to maintain such a rich P/E ratio if earnings aren’t growing at a rate to support the premium.

Following the Appen share price decline, the company now trades on a P/E of 28.8.

The post The Appen (ASX:APX) share price just hit a 3-year low. Here’s why appeared first on The Motley Fool Australia.

More reading

• Here’s why the Appen (ASX:APX) share price is down 12% in a month
• 3 ASX shares with bags of potential
• Analysts name 3 stellar ASX growth shares to buy right now
• Why this top broker thinks the Appen (ASX:APX) share price can double
• 2 ASX growth shares analysts rate as buys right now

Motley Fool contributor Mitchell Lawler owns shares of Appen Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Appen Ltd. The Motley Fool Australia owns shares of and has recommended Appen 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 Zip Co Ltd (ASX: Z1P) share price plunged on open, down 5.63% to $6.70 within minutes of the opening bell.

Zip shares have bounced off intraday lows, currently down 1.83% to $6.97.

Why did the Zip share price fall this morning

Tech-shares tank overnight

The US market tumbled overnight, with major indices S&P 500, Nasdaq Composite and Dow Jones Industrial Average down 2.04%, 1.63% and 2.83% respectively.

US-listed BNPL giant Affirm Inc (NASDAQ: AFRM) was among the worst-performing tech shares, tanking 10.79% to US$114.52.

Square Inc (NASDAQ: SQ), which is finalising its acquisition of Afterpay Ltd (ASX: APT), also tanked 5.97% to US$242.70.

The Zip share price ultimately cratered this morning under the bearish overnight performance of its tech and payment peers.

US 10-year Treasury yields top 1.5%

The US 10-year Treasury yield rose sharply overnight on rising inflation fears, climbing to a 3-month high of 1.55%.

Treasury yields have surged in the past week, rising more than 240 basis points from 1.30%.

A tech company’s valuation typically relies on fast-growing, future cash flows, which are discounted more heavily as yields increase.

Higher interest rates can also translate into higher borrowing costs which could hinder a company’s growth plans and balance sheet.

To add further insult to injury, the US Federal Reserve has indicated that it may begin pulling back its stimulus measures and consider raising interest rates as soon as next year, according to CNBC.

ASX slides on Wednesday

The Zip share price decline is broadly consistent with the broader S&P/ASX 200 Index (ASX: XJO) and S&P/ASX Information Technology (INDEXASX: XIJ) which have tanked a respective 1.37% and 2.72%.

The Afterpay share price is currently down 3.77%, likely influenced by the sharp decline of Square overnight.

Meantime, the Sezzle Inc (ASX: SZL) share price opened 4.55% lower to $5.75 and is currently down 2.7% to $5.77.

The post Why the Zip share price plunged 6% this morning appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: Big four banks fall, Afterpay tumbles
• Afterpay (ASX:APT) and Zip (ASX:Z1P) share price falls as Mastercard opens up the BNPL sector
• Why ASX tech shares are crashing on Wednesday
• The S&P 500 just dropped 2%. Why is this impacting ASX 200 shares?
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Motley Fool contributor Kerry Sun 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, Affirm Holdings, Inc., Square, and ZIPCOLTD 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 Transurban Group (ASX: TCL) share price is in the red on Wednesday, trading down 1.81% at the time of writing to $13.60 a share.

It seems shares in the toll company are facing multiple headwinds in today’s trading session.

Let’s take a look at why the Transurban share price is struggling.  

What’s weighing down the Transurban share price?

Shares in Transurban are facing several challenges today.

Weakness in the broader market has painted the exchange red with the S&P/ASX200 Index (ASX: XJO) currently 1.52% lower for the day.

In addition to weakness in the overall market, shares in Transurban are also pricing in a more direct challenge.

The company’s infrastructure services have been on the receiving end of a targeted campaign from transport workers.

According to a recent article in the Australian Financial Review, one of Australia’s largest trucking companies, Toll Group, has urged drivers to avoid using toll roads.

The Transport Workers Union (TWU) has also weighed in, advocating that trucking operators could not afford to keep paying rising toll fares.

In particular, the article highlighted new toll roads like Sydney’s WestConnex where trucks typically pay three times the fares of cars.

As part of the action, the TWU has urged a review of current tolling regimes and more transparency on how toll fares are set.

More on Transurban

Shares in Transurban recently made headlines after the company launched a capital raising.

The infrastructure giant is looking to raise $4.2 billion to support its acquisition of the remaining 49% stake in the WestConnex from the NSW Government for $11.1 billion.

Transurban noted that WestConnex has close to 40 years concession life remaining.

As a result, additional highway extensions are expected to generate significant free cash and support distributions.

With the increased holding in WestConnex, Transurban’s management expects to receive more than $600 million of potential capital releases until FY25.

The acquisition has resulted in mixed assessments from analysts and brokers.

Most recently, leading broker Citi issued a neutral rating on Transurban with a share price target of $13.78.

Analysts expect the company’s acquisition of WestConnex could be dilutive in the near term.

Snapshot of the Transurban share price

The Transurban share price has been all over the place this year.

As a result, shares in the infrastructure giant are relatively flat since the start of the year.

At the time of writing, the Transurban share price is trading around 2% lower for the day.

The post Transurban (ASX:TCL) share price slides as truckies push back on tolls appeared first on The Motley Fool Australia.

More reading

• 2 leading infrastructure ASX shares to consider
• Is the Transurban (ASX:TCL) share price a buy after the WestConnex acquisition?
• Top brokers name 3 ASX shares to buy next week
• Why Lake Resources, Ramelius, Telix, & Transurban shares are falling
• ASX 200 (ASX:XJO) midday update: Transurban falls, Premier Investments jumps

Motley Fool contributor Nikhil Gangaram 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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