Australian shares have closed lower after two straight sessions of gains, weighed down by technology stocks, while banking giant Westpac jumped after reporting first-quarter profit above estimates.
The ASX 200 was down 0.1 per cent, at 7,078.
Technology stocks fell as much as 5.9 per cent, extending losses for the year so far to more than 20 per cent, weighed down by Afterpay’s new owner Block (-9.8pc) and Xero (-5pc).
Novonix (-14.7pc), Wisetech (-8pc) and Zip (-9.6pc) were also leading the losses.
Gaming company Aristocrat Leisure dropped about 0.5 per cent to $41.09, after its offer to buy Britain's Playtech fell through.
Among the best performers were Nufarm (+20.2pc), Amcor (+3pc) and Virgin Money (+1.4pc).
Mining stocks jumped as much as 1.5 per cent to be one of the three sectors in the positive territory, benefited by stronger commodity prices, with Rio Tinto (+2.4pc), BHP (+3.1pc) and Fortescue (+3.3pc) advancing.
The Australian dollar was down 0.2 per cent, at 71.25 US cents, by 4:22pm AEDT.
Brent crude oil was down 0.2 per cent, trading at $US89.26 a barrel, by 4:24pm AEDT.
Westpac, Nick Scali update on profit
Banking group Westpac rose as much as 2.3 per cent, to $21.07, after the lender beat estimates for first-quarter profit and made headway in cutting costs.
Australia's fourth-largest bank by market value said it cut its headcount by more than 1,100 over the quarter, reduced corporate functions by about 20 per cent and combined key management roles.
The lender reiterated that it would meet its cost target of $8 billion by 2024, as it cut expenses to $2.70 billion in the quarter, down 7 per cent from the quarterly average of the second half, excluding notable items.
Westpac also recorded a 20 per cent drop in first-quarter cash earnings and warned that steep competition in mortgages would drag margins more this year, forcing the lender to bring forward organisational changes.
It expects to book restructuring charges in both its half-year and full-year results.
Chief financial officer Michael Rowland said the environment "remains highly competitive, and we continue to see pressure on margins".
Westpac is struggling with intense competition for mortgages amid record-low rates, with customers now considering a switch to fixed-rate loans that tend to be written at a lower margin than those at variable rates.
The bank's stock has lost about a fifth of its value since November, when it reported a big drop in margins, a profit miss and slow progress in a costly turnaround to fix outdated software and convoluted procedures.
Net interest margin, a key measure of profitability, fell 8 basis points in the first quarter to 1.91 per cent from 1.99 per cent in the second half of fiscal 2021.
While the bank beat consensus estimates for cash earnings, it set aside $551 million more to cover the pandemic's hit to supply chains and certain sectors, resulting in an impairment charge of $118 million in the quarter.
Cash earnings for the three months to December 31 came in at $1.58 billion, compared with $1.97 billion reported a year ago. That was higher than the $1.47 billion forecast by Citigroup and $1.38 billion by Morgan Stanley.
Meanwhile, Nick Scali reported its half-yearly net profit after tax fell 6.6 per cent, to $35.6 million, hurt by supply chain disruptions caused by the outbreak of the Omicron variant.
Its shares were up 1 per cent, trading at $14.54.
Shares extend gains on mixed US earnings
Global stocks rallied on Wednesday to close higher as strong earnings from US technology companies and OPEC+ plans for moderate oil output helped to counter jitters over weak economic reports.
Investors also shrugged off the pace of central banks' interest rate hikes.
The STOXX index of 600 European companies rose 0.45 per cent, up for a third-straight session, to recoup nearly half its losses during January's global rout in shares.
MSCI's gauge of stocks across the globe gained 0.80 per cent.
All three Wall Street benchmarks closed higher on Wednesday, a fourth-straight session of gains after a turbulent start to the year, aided by upbeat earnings from Google parent Alphabet and chipmaker Advanced Micro Devices.
The S&P 500 gained 42.84 points, or 0.94 per cent, to end at 4,589.38 points, while the Nasdaq Composite gained 71.54 points, or 0.50 pe cent, to 14,417.55. The Dow Jones Industrial Average rose 224.09 points, or 0.63 per cent, to 35,629.33.
Alphabet rose 7.5 per cent after reporting record quarterly sales on Tuesday, and said it planned to undertake a 20-to-one stock split.
"Google crushed earnings and that optimism has many traders feeling that the bottom is in for the mega-cap tech giants," Edward Moya, senior market analyst from OANDA, said in a note.
"Alphabet's earnings get an A+ after posting strong advertising revenue growth, record net income profit, impressive Google Cloud revenue, surging interest with YouTube shorts and as the company explores innovation with blockchain."
However, Facebook owner Meta's shares plunged more than 20 per cent late on Wednesday as the social media company missed on Wall Street earnings estimates and posted a weaker-than-expected forecast.
Meta said it had ben hit by Apple's privacy changes to its operating system, which had made it harder for brands to target and measure their ads on Facebook and Instagram, and by macroeconomic issues such as supply-chain disruptions.
Amazon dipped ahead of its earnings date on Thursday.
Last month, the tech-heavy Nasdaq fell as much as 19 per cent from its all-time high in November as investors dumped highly valued growth stocks on prospects of faster-than-expected rate hikes.
Traders are betting on five rate hikes this year after hawkish comments from the US Federal Reserve in January.
ABC/Reuters
