Fund managers overseeing some of the ASX’s largest companies have experienced a bruising earnings season, with nearly $11 billion wiped from Woolworths and WiseTech on Wednesday alone. These heavy sell-offs are the latest in what investors describe as one of the most turbulent reporting seasons for large-cap stocks in recent years. Building materials company James Hardie previously collapsed nearly 30 per cent, while healthcare giant CSL shed over $20 billion in value the previous week, recording its largest single-day fall ever.
Atlas Funds Management chief investment officer Hugh Dive noted the unusual volatility in large, blue-chip names compared to the past five years. The ASX is now on track for a third consecutive year of shrinking earnings per share, with large caps expected to decline by 7 per cent in FY2025 and stagnate in FY2026, according to E&P Financial. In contrast, companies outside the top 20 are projected to grow earnings by 10 per cent this year and 13 per cent in 2026.
WiseTech, one of the ASX’s highest-valued technology companies, slumped 11.9 per cent on Wednesday after missing analyst forecasts. Wilson Asset Management analyst Hailey Kim attributed the wild share price swings to investor expectations setting the stage for oversized reactions. WiseTech provides software solutions for the logistics industry. Woolworths, a supermarket giant, saw shares plunge 14.7 per cent after cutting its final dividend and reporting a 17 per cent fall in underlying net profit to $1.4 billion. Its Australian supermarkets underperformed, and its discount chain Big W also weighed on results.
UBS equities executive director Rob Taubman noted the sharp increase in volatility for large caps, dependent on results meeting or missing expectations. Atlas’ Dive added that outsized market reactions were sometimes amplified by algorithmic trading, with small beats or misses leading to more significant moves than usual. He cited Westpac and Lottery Corporation as examples of stocks that jumped on results, while questioning whether the share price moves aligned with fundamentals.
