$56b bloodbath as shares hit free-fall

THE Australian share market suffered its biggest one-day fall in more than two years yesterday as nervous investors wiped $56 billion from the value of local companies.

The ASX 200, which broadly tracks the 200 largest listed companies by market value, closed 3.2 per cent lower.

The result equalled the worst single-day fall since the British people shocked financial markets across the globe by voting to leave the European Union in June 2016.

The local bourse has shed 4.75 per cent over the past two days in a sell off which has wiped about $85 billion from the value of Aussie companies and taken market back to where it was in mid-October.

The average Aussie super fund has also seen all of its gains for 2018 erased.

Key markets in the US, Europe, Britain and Asia have all declined sharply over the past two days as the threat of inflation and higher interest rates in the US spooks Wall Street. The sell-off has been broadbased hitting all major bluechip companies.

All four banking majors lost ground with Westpac down 3.1 cent at $30.33 and NAB off 3 per cent at $28.32

The Commonwealth Bank and ANZ lost 3 per cent each to close at $77.40 and $27.88.

Both big miners were hit, with BHP Billiton down 2.7 per cent to $29.33 and Rio Tinto shedding 1.4 per cent to $75.43.

Telstra closed 3 per cent lower at $3.51, Coles-owner Wesfarmers gave up 2.8 per cent to $41 and Woolworths dropped 3 per cent to $26.84.

Superannuation research house SuperRatings said the average balanced super fund would have lost about 2.4 per cent since Monday.

That equates to a $2400 hit on a $100,000 balance.

Tuesday’s sell-off followed the Dow Jones Industrial Average — a key Wall Street benchmark index — shedding 1175 points overnight on Monday in its biggest one-day point decline on record.

US investors dumped stocks after strong jobs numbers opened the door to the US Federal Reserve raising interest rates quicker than expected.

Higher interest rates will make equities relatively less attractive as an investment.

However, the Dow Jones remains more than 20 per cent higher than it was a year ago.