ASX sheds 3.7% in worst day since March 2020
Make us a preferred source
Make us a preferred source on Google
The news: The Australian sharemarket fell sharply for a second straight session, recording its worst day since March 2020, following steep losses on Wall Street on Friday and growing fears of a recession in the US.
The numbers: The benchmark ASX 200 index fell 3.7% to end at 7,649.6, with all 11 sectors finishing in red. It meant the sharemarket has lost 5% over the past two trading days.
This represents the worst day for the index since March 2020, when there were multiple days of equivalent or worse performance during the early stages of the Covid pandemic.
The worst performing sector was information technology, down 6.22%, followed by financial (-4.98%) and energy (-4.4%). Block (-10.56%), Karoon Energy (-9.31%), and WiseTech Global (-8.85%) were among the worst performers across the ASX 200.
Telecoms firm TPG Group, which initially climbed in early trading on the ASX, shed 1.52% after confirming it held non-exclusive discussions with Vocus for the sale of its fixed network as part of a strategic review process.
Argo Investments also lost ground, closing 1.9% lower, after reporting a drop in full-year profit, weighed down by lower income from companies in its investment portfolio.
As did real estate funds manager Centuria Capital Group, falling 2.84% after agreeing to acquire a 50% interest in data server provider ResetData for $21 million.
Ramsay Health Care shares dropped 0.44% after Australia's largest private hospital operator said it expects to miss its profit and capital expenditure forecasts for the 2024 financial year.
Shares in rare earths producer Lynas declined 2.95% despite a significant upgrade to the estimate of mineral resources at its main Mount Weld deposit in Western Australia.
RedMed was one of only three ASX 200 companies that made gains, up 2.8%, as analysts remain bullish on the medical equipment maker after the release of its June quarter results on Friday.
Internationally, Japan’s benchmark Nikkei 225 stock index also slumped, losing 12.5% to 31,419.7. It extended a sell-off that began last week, compounded by the Bank of Japan's decision to raise its benchmark interest rate on Wednesday.
Meanwhile, the world's two biggest cryptocurrencies were hard-hit by the market rout, with Bitcoin losing 11.4% and Ether down 15.2%.
The context: Overnight, monthly services purchasing managers index (PMI) data in the US will provide an indicator of strength in the country's services sector, a gauge of its wider economic activity.
In the local market, Arcadium Lithium and Coronado Global Resources are expected to report on Tuesday morning.
The Reserve Bank of Australia is will also announce a decision on interest rates at 2:30pm AEST, with RBA chair Michele Bullock hosting a press conference an hour later.
