Finance Finance News ASX tumbles $70b in two days over global recession fears
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ASX tumbles $70b in two days over global recession fears

Australian shares tumbled in early trade over rising fears of a global recession with the benchmark index plunging by 3.7 per cent in the past two days. Photo: AAP
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Australian shares are trading sharply lower due to rising fears of a global recession.

By 3.30pm (AEST), the ASX 200 had dropped 2 per cent to 6,505 points – a slight recovery compared to its earlier trading losses (-2.4 per cent).

It has, however, plunged by 3.5 per cent in two days, following yesterday’s losses (-1.5 per cent).

In dollar terms, the local share market has lost around $70 billion in value over two trading sessions.

Investor sentiment has also dipped across the Asia-Pacific, with Tokyo’s Nikkei (-2 per cent) and Hong Kong’s Hang Seng index (-0.5 per cent) experiencing moderate to heavy losses.

The Australian dollar is buying 67.17 US cents, around its lowest value in a decade.

Best and worst performers

Every sector is posting heavy losses, with energy (-2.9 per cent), technology (-2.4 per cent) and telcos (-2.4 per cent) being the weakest performers.

The major banks – Commonwealth Bank, Westpac, ANZ and NAB – are the biggest drags on the markets, having lost between 2.3 and 3.3 per cent each.

Shares in mining giants BHP, Rio Tinto and Fortescue Metals have dropped between 2.6 and 3.8 per cent each.

Energy companies have also been hard hit, with Origin Energy, Santos and Woodside Petroleum down between 2.9 and 3.8 per cent.

19 companies on the ASX 200 – with gold miners among the list – are climbing higher amid the sea of red.

Northern Star Resources, Saracen Mineral Holdings and Evolution Mining are the best-performing stocks.

The safe-haven demand for gold surged amid concerns of a global economic downturn.

Spot gold prices have lifted 1.4 per cent to $US1,500.37 an ounce.

On the flipside, Austal (-5.1 per cent) and NRW Holdings (-4.9 per cent) are posting some of the steepest losses.

Mounting global risks

The local market’s weak performance follows a heavy sell-off that occurred across foreign markets overnight.

London’s FTSE was the worst performer, dropping 3.2 per cent in one session.

On Wall Street, the Dow Jones index shed 838 points, or 3.1 per cent, in the past couple of days.

The plunge was triggered by the United States recording its worst manufacturing figures in more than 10 years, and worse-than-expected private sector job figures.

It appears the ongoing US-China trade war is starting to hurt America’s economy, which has begun to show signs of faltering.

Adding to trade concerns, the US will impose $US7.5 billion ($11.2 billion) worth of tariffs on European Union imports in two weeks.

This was after the World Trade Organisation (WTO) ruled that the EU had been granting illegal subsidies to Airbus to give it an unfair competitive advantage over Boeing.

United States has won approval from the WTO to levy import tariffs on $US7.5 billion ($11.2 billion) worth of European goods.

Investors also reacted poorly to pessimistic data from the European Union, revealing that factory activity had contracted to a seven-year low.

ABC