Finance Finance News Australian stock market a ‘sea of red’ as horror month continues

Australian stock market a ‘sea of red’ as horror month continues

asx stock follows wall st plunge
The horror trading day has seen almost every stock fall. Photo: Getty
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The Australian stock market plunged on Thursday, following Wall Street’s biggest sell-off in seven years and wiping out gains made in the past 12 months.

The benchmark ASX 200 index, which tracks the performance of the 200 largest companies on the Australian market, had plummeted 2.15 per cent by mid-afternoon on Thursday.

By close, the index was 2.9 per cent below its opening level.

The latest losses mean the ASX 200 has dropped by about 10 per cent since its peak in late-August, with almost every stock posting losses. Thursday’s losses alone wiped about $40 billion from the market’s value.

“It’s not outlandish now to call it a correction,” IG market analyst Kyle Rodda told the ABC.

“Whether it starts manifesting in what we consider to be a bear market, which is where we start to see the selling outweigh the buying or the markets falling rather than rising as a trend, it remains to be seen.”

Only six of the 200 largest listed companies posted gains on Thursday. The Big Four banks – Commonwealth Bank, Westpac, ANZ and NAB – each lost between 1.6 and 2 per cent of their value.

Scandal-ridden finance giant AMP had lost 17.4 per cent by 2.45pm (ADST), bringing its share price from $3.27 to $2.70. That continued a horror downward trend for the financial giant, whose stock has lost roughly half its value since March.

Commonwealth Bank’s stockbroking arm CommSec said financial companies were one of the “two biggest contributors” to Thursday’s falls. The other was the materials sector.

However,  CommSec also noted that all sectors were in negative territory on Thursday. More than 90 per cent of companies listed on the ASX 200 were “under selling pressure”.

“It is a sea of red for local shares,” CommSec said.

BHP was “the biggest individual drag” on the market, having fallen 2.9 per cent, according to CommSec.

The grim start to the ASX’s trading day came after New York’s benchmark S&P 500 index fell by 3.1 per cent at close of trade earlier on Thursday. It was the US market’s sixth straight day of trading losses.

“Worries over global economic growth saw all major US indices slump,” CommSec said.

The industrial-heavy Dow Jones index lost all its 2018 gains when it fell 2.4 per cent, to 24,583, while the IT-dominated Nasdaq plummeted almost 4.5 per cent – its worst trading day in more than seven years.

The Nasdaq slump erased almost US$33 billion ($47 billion) from the fortunes of the tech sector’s 61 richest people, according to the Bloomberg Billionaires Index.

Amazon founder Jeff Bezos, the world’s richest person, lost $US8.2 billion ($11.6 billion) as a result of the trading rout, reducing his net worth to $US138 billion.

Facebook chief executive Mark Zuckerberg’s fortune dropped by US$3.2 billion ($4.5 bullion) and Google co-founders Larry Page and Sergey Brin watched their fortunes slide by a combined US$4.5 billion ($6.4 billion).

The Wall Street falls came amid disappointing quarterly earnings from big-name US companies and international condemnation of major oil producer Saudi Arabia for its involvement in the killing of journalist Jamal Khashoggi.

Also affecting US market confidence were concerns that the US-China trade war was causing a global slowdown and the release of the Federal Reserve’s latest report on the US economy. It blamed the Trump administration’s import tariffs for a rise in prices charged by factories.

-with agencies