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Australian shares shed $38b in sell-off

Monday, 12 Sep 2016 13:42:46 | Justine Parker

A share price display shows stocks on the Australian Stock Exchange (ASX) in Sydney on August 8, 2011. (AFP: Torsten Blackwood, file photo)

Australian shares have had a dismal day, finishing the session more than 2 per cent lower and wiping around $38 billion in value off the market.

Markets at 4:59pm (AEST)

  • ASX 200 -2.2% to 5,220, All Ords -2.2% to 5,319
  • Major gains: Seven West +0.7% to $0.77, QBE +0.6% to $9.68, Tatts Group +0.3% to $3.84
  • Major losses: Australia Agricultural Company -6.5% to $1.58, Mineral Resources -6.4% to $10.53, Sydney Airport -6.3% to $6.42
  • AUD: 75.3 US cents, 56.7 British pence, 77.2 Japanese yen, 66.9 euro cents, $NZ1.03
  • Futures: Euro STOXX 600 -1.4% to 340.3, FTSE -1.2% to 6,696, S&P 500 -0.5% to 2,105

Today's fall is the biggest loss since Britain voted to leave the European Union in June.

Investors sold out across all sectors following Wall Street's plunge on Friday, after Federal Reserve Boston president Eric Rosengren said "a reasonable case can be made" for tightening interest rates to avoid overheating the economy.

Since December, Federal Reserve chair Janet Yellen has repeated that future rate rises would be gradual, depending on jobs growth and inflation rising closer to the Fed's target of 2 per cent.

However, after nine months without further action, Mr Rosengren's comments have been interpreted as a sign that next week's Fed meeting may be the time for an overdue rate hike.

At the close, the ASX 200 dropped 2.2 per cent to 5,220, while the All Ordinaries index had also fallen 2.2 per cent to 5,319.

Investors will also eye a speech from Fed official Lael Brainard, who is known to be dovish on rates, due later in the global day.

"We could be on the verge of a powerful concurrence of factors as volatility takes grip," said Stephen Innes, senior currency trader at OANDA Australia and Asia Pacific in a note.

"Traders have been quick to price in worst case scenario as interest rate rise jitters start taking hold."

A sea of red

All major sectors fell, with losses across banking and mining weighing the most.

All of the big four banks fell: Commonwealth Bank lost 0.9 per cent to a five-month low of $70.22; National Australia Bank dropped 2.6 per cent to a one-month low of $26.60; Westpac lost 1.7 per cent; and ANZ fell 2.1 per cent.

Among the miners, BHP Billiton and Rio Tinto had tumbled 4 per cent and 2.5 per cent respectively heading into the close.

Energy stocks did little better, with oil and gas producer Santos dropping 5.3 per cent to $3.79.

Just five of the top 200 stocks finished in the green, with Kerry Stokes's media empire, Seven West Media, topping the board with a gain of 0.7 per cent to $0.77.

Insurer QBE added 0.6 per cent.

The Australian dollar slipped to 75.3 US cents about 5:00pm AEST, having been around 77.5 US cents before the US share market rout on Friday.

In commodities trade, oil prices fell, with Brent crude dumping 1.6 per cent to $US47.25 a barrel while spot gold rose to $US1,330 an ounce.

AustraliaPlus


 

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