ASX on track for largest fall since August selloff
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More news: The Australian sharemarket is on track for the largest selloff since 5 August, 2024, when it recorded its worst day since March 2020, following broad losses on Wall Street overnight.
The ASX was down 2.02% by 1:40pm AEST, following declines across the three major indices in the US triggered by softer-than-expected manufacturing data. Meanwhile, tech giant Nvidia slumped 10% on the Nasdaq, a loss of around $415 billion, representing the largest single-day fall in the history of the stock market.
Energy was the worst performing sector on the ASX, shedding 3.03%, as concerns over China's economic outlook weighed on benchmark crude prices, dragging oil stocks lower.
The materials sector fell 2.45%, as gold miners were hit by a steadying gold price, with investors bracing for monthly US payrolls data later this week.
Australian shares set to drop after Wall Street tumble
The news: The Australian sharemarket is set to open sharply lower, tracking a broad sell-off on Wall Street ahead of data likely to influence how much the US Federal Reserve will lower interest rates.
The numbers: The Dow Jones index ended 1.51% lower, while the broader S&P 500 fell 2.12% and the tech-heavy Nasdaq slumped 3.26%. In the local market, ASX 200 futures were down 94 points or 1.2% to 7,971 points at 7am AEST on Tuesday.
The context: US stocks tumbled at the start of one of the market's historically worst months, with all three major indices recording their biggest daily percentage declines since early August.
Market sentiment weakened as Institute for Supply Management data showed US manufacturing remained subdued despite a modest improvement in August from an eight-month low in July.
The so-called Magnificent Seven mega cap technology stocks, which have led this year's rally, lost ground, led by a nearly 10% slump in Nvidia. Alphabet fell 3.6%, Apple lost 2.7% and Microsoft shed 1.8%.
Traders are awaiting several labour market reports ahead of Friday's non-farm payrolls data for August. The Fed's meeting on 17-18 September will be closely observed following Chair Jerome Powell's recent support for easing monetary policy. Odds of a 25-basis point interest rate cut are at 63%, while those for a bigger 50 bps reduction are at 37%.
In the local market, investors will be focused on June quarter GDP data at 11:30am.
The source: Reuters
