Market plunge wipes off $155b
AUSTRALIA’S stock market suffered its worst single day loss in nearly a dozen years yesterday as a brewing price war over oil added to the global tumult.
The benchmark S&P/ ASX200 index shed about $155 billion in value, plunging 455.6 points, or 7.33 per cent, to a two-year low of 5760.6.
The All Ordinaries index finished down 465.1 points, or 7.4 per cent, at 5822.4.
In percentage terms, it was the ASX200’s biggest loss since an 8.34 per cent drop on October 10, 2008, during the global financial crisis. In points terms, it was the ASX200’s biggest loss ever.
“Wholesale panic,” said
CMC Markets chief market strategist Michael McCarthy.
“They’re coming in and selling hard.”
The energy sector plunged 20 per cent as Saudi Arabia and Russia promised to boost oil production in what looked to be the start of a new price war.
The price of Brent crude, which had traded at $US68 a barrel in January, plunged from $US46 on Friday to $US31.48 yesterday.
CommSec chief economist Craig James predicted our petrol prices could also drop.
“Motorists may be able to look forward to filling up for near $1 a litre,” he said in a research note.
Woodside Petroleum fell 18.4 per cent to a 15-year low of $21.54, Oil Search plunged 35.2 per cent to a 15-year low of $3.30, and Santos was 27 per cent lower at $4.89.
“These are extraordinary moves for individual stocks,” Mr McCarthy said.
Among miners, BHP plunged 14.4 per cent to a 2½year low of $27.55, while Rio Tinto was down 6.4 per cent to $80.77 and Fortescue Metals fell 10.6 per cent to $8.58.
Goldminer Newcrest rose 2.5 per cent as the price of gold traded at $US1664 an ounce after breaking the $US1700 barrier for the first time since early 2013.
The major banks sold off heavily too, with Commonwealth dropping 6.5 per cent to $69.15. ANZ and NAB both skidded 8.5 per cent, to $20.27 and $20.14 respectively, while Westpac fell 8.6 per cent to $19.52.
Federal Treasurer Josh Frydenberg sought to calm things down, saying market volatility was not uncommon in times like these and there were a number of factors at play.
But Wall Street looked to be headed for a major sell-off as well.
An early afternoon crash also sent the Aussie dollar plummeting to US63.11c, an 11year low against the US greenback. It later bounced back to US65.46c.