The Australian stock exchange suffered its worst losses in more than two years on Tuesday after playing catch-up to a brutal sell-off on Wall Street as a holiday-shortened trading week kicked off.

The benchmark S&P/ASX200 index recovered somewhat in afternoon trading, but still closed down 246 points, or 3.55 per cent, to 6686, its lowest level since February 2021. The broader All Ordinaries finished down 264 points, or 3.69 per cent, to 6881.2.

The ASX200 is now down 7.3 per cent this month, 10.5 per cent this year and 12.7 per cent from its August 2021 peak. It has dropped in five of the past six sessions, with the losses eclipsing 1 per cent in all but one of those days.

Tuesday’s plunge was the worst since a 5.01 per cent sell-off on May 1, 2020, with every sector down at least 1.8 per cent.

The US S&P 500 market has technically entered a bear market, which signifies a fall of 20 per cent from recent highs.

There are growing fears the US will enter a recession within the next year, but although growth forecasts have been cut in Australia, the country’s economy is unlikely to contract.

Some of the world’s wealthiest people have suffered huge losses. Elon Musk has lost $US12 billion ($17.3 billion) overnight and $US73 billion ($105.2 billion) since the start of the year. Gautum Adani lost almost $US2 billion ($2.9 billion) in the latest trading, but remains up $US16 billion ($23 billion) for the year.

According to Bloomberg’s billionaire index, Andrew Forrest and Gina Rinehart have lost more than $1 billion this week. Forrest still has $US21 billion ($30.3 billion) and Rinehart $US22 billion ($31.7 billion).

Atlassian founders Mike Cannon-Brookes and Scott Farquhar both lost about $US1 billion ($1.4 billion) this week but still sit on $US10 billion ($14.4 billion) each.

Crypto has also been hammered and Bitcoin is now trading near $US21,000 ($30,286). About $US2 trillion ($2.9 trillion) has been wiped off the value of the total crypto market since December. In April, Bitcoin was trading above $US40,000 ($57,687). 

Tech stocks have also suffered because of the more speculative nature of the investment.

The fall on the ASX wipes out any hope that superannuation funds could generate another positive financial year.

-with agencies