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Aussie shares plunge in early trade

Business

The Australian share market has plunged in early trading, playing catch-up to a brutal overnight sell-off on Wall Street as a holiday-shortened trading week kicked off.

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The benchmark S&P/ASX200 index was down 342.1 points, or 4.96 per cent, to 6,588.5 at 1103 AEDT on Tuesday, its lowest level since February 2021.

The broader All Ordinaries was down 4.89 per cent to 6,795.6.

Every sector was down at least 2.0 per cent. Tech plunged by 7.3 per cent, materials were down 5.6 per cent, and financials dropped 5.0 per cent.

“The sharpness of the fall suggests that we’ve entered a new and uglier phase of the market,” Tiger Brokers Australia chief market strategist Michael McCarthy told AAP.

“None of us knows the future with certainty, but that sort of sharp drop suggests that things are not going to settle down immediately, and we could be looking at further significant changes in prices.”

Cryptocurrencies have been “absolutely thumped”, McCarthy noted, with Bitcoin trading for a third of its value from eight months ago, and home prices are under pressure.

It is all linked to US inflation figures released on Friday night coming in far hotter than expected at 8.6 per cent, which means the US Federal Reserve will have to hike rates and withdraw monetary stimulus more quickly than the markets would have liked.

Among blue-chip shares early on Tuesday, BHP was down 5.7 per cent to $43.56 while Rio Tinto and Fortescue had fallen 5.8 per cent and 8.1 per cent, respectively.

The big four banks were down between 5.5 and 6.0 per cent.

Afterpay owner Block had dropped 17.8 per cent to $90.13 as Bitcoin fell 15.9 per cent to $US22,485, its lowest level since December 2020.

South Australian headquartered miner Oz Minerals was down 6.9 per cent at noon to $22.07 while Santos had lost 4.2 per cent to $8.17.

Overnight, US equities slumped after the S&P 500 index settled into bear market territory, traditionally signalled by a cumulative decline of more than 20 per cent.

The Dow Jones Industrial Average fell 2.79 per cent to 30,516.74, the S&P 500 lost 3.88 per cent to 3,749.63, and the Nasdaq Composite dropped 4.68 per cent to 10,809.23.

AAP

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