06/02/2018 - 15:35

ASX sheds $66bn in global market rout

06/02/2018 - 15:35

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The Australian share market has suffered its biggest one-day fall in more than two years, wiping around 3.3 per cent from its value, after Monday night's plunge on Wall Street.

The Australian share market has suffered its biggest one-day fall in more than two years, wiping around 3.3 per cent from its value, after Monday night's plunge on Wall Street.

Today's big drop on the ASX followed a 1.6 per cent fall on Monday. 

The benchmark S&P/ASX200 index dropped 192.9 points, or 3.3 per cent, to 5,833.3 points in its worst session since September 2015, erasing more than three months of gains.

Perth-based Monadelphous Group was one of the biggest losers for the day, down 7.54 per cent, while Pilbara Minerals also shed nearly 7 per cent.

Meanwhile, three Perth-based gold producers were among the best performing stocks in the ASX200, with Regis Resources up 0.25 per cent and Northern Star Resources unchanged.

Resolute Mining was unchanged, putting it in the top five performers in the ASX200.

Other Asian markets also took a hit, with Japan's Nikkei dropping almost 5 per cent and Hong Kong's Hang Seng Index down more than 4 per cent in late trade.

CMC Markets chief market analyst Ric Spooner said there were signs that Wall Street's rout - due in part rising bond yields and the prospect of rapid US interest rate hikes - was not over, with Dow Jones futures more than 2 per cent weaker as the Australian market closed.

"People are concerned by the size of the selloff which has led more people to take defensive action," he said.

However, he cautioned about overreaction to the dramatic plunge.

"The size of the movements on the Australian share market over the past two days have been a bloodbath, there's no doubt about that, but at the end of the day it has only taken the market back to where it was in October," Mr Spooner said.
 
Energy stocks were among the hardest hit, as global oil prices weakened.

Origin Energy tumbled 6.2 per cent, Santos fell 4.4 per cent, Woodside Petroleum shed 3.9 per cent and Oil Search was 3.3 per cent weaker.

An overnight rise in the iron ore price was not enough to protect the big miners, with Rio Tinto and Fortescue Metals Group each losing more than 1 per cent, while BHP Billiton suffered a deeper 2.7 per cent fall as activist shareholder Elliot Advisors renewed its push for an end to the company's dual-listed structure.

Perth-based conglomerate Wesfarmers fell 2.8 per cent. 

Westpac was the weakest of the major banks, dropping 3.1 per cent, while Commonwealth Bank, ANZ and National Australia Bank each lost 3 per cent.

Macquarie Group dropped 5.3 per cent despite forecasting a 10 per cent improvement in its annual profit to a record $2.4 billion.

The release of weaker-than-expected retail spending figures for December added to retailers' woes, with JB Hi-Fi dropping 2.4 per cent, Harvey Norman shedding 2.3 per cent and auto and sports goods retailer the Super Retail Group 3.1 per cent weaker.

The Australian dollar is also significantly lower, impacted by the retail data, a deterioration in Australia's trade balance in December, and the Reserve Bank of Australia's decision to leave the cash rate at 1.5 per cent.

The currency was already weaker against the US greenback in overnight trading, and ended local trade more than three quarters of a US cent lower than a day earlier, at US78.57 cents.

ON THE ASX:

* The benchmark S&P/ASX200 dropped 192.9 points, or 3.2 per cent, to 5,833.3 points.

* The broader All Ordinaries index shed 198.2 points, or 3.23 per cent, to 5,930.2 points

* The SPI200 futures contract was down 178 points, or 2.99 per cent, at 5,783 points.

* National turnover was 5.7 billion securities traded worth $10.9 billion.

CURRENCY SNAPSHOT AT 1700 AEDT:

One Australian dollar buys:

* 78.57 US cents, from 79.39 US cents on Monday

* 85.55 Japanese yen, from 87.26 yen

* 63.49 euro cents, from 63.71 euro cents

* 56.25 British pence, from 56.20 pence

* 107.65 NZ cents, from 108.63 NZ cents

GOLD:

The spot price of gold in Sydney at 1700 AEDT was $US1,343.40 per fine ounce, from $US1,332.25 per fine ounce on Monday.

BOND SNAPSHOT AT 1630 AEDT:

* CGS 4.50 per cent April 2020, 2.0113pct, from 2.0565pct on Monday

* CGS 4.75pct April 2027, 2.7763pct, from 2.8874pct

Sydney Futures Exchange prices:

* March 2018 10-year bond futures contract at 97.18 (implying a yield of 2.82pct), from 97.065 (implying a yield of 2.935pct) on Monday

* March 2018 3-year bond futures contract at 97.84 (2.16pct), from 97.77 (2.23pct).

(*Bond market closes taken at 1630 AEDT previous local session; currency closes taken from 1700 AEDT previous local session)

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