$56b wiped off share market
The Australian share market has suffered its biggest one day fall in more than two years as nervous investors wiped $56 billion from the value of local companies. The ASX200 closed 3.2 per cent lower yesterday — equalling the worst single-day fall on the local bourse since the Brexit vote in June 2016.
THE Australian share market has suffered its biggest oneday fall in more than two years as nervous investors wiped $56 billion from the value of local companies.
The ASX 200 – the nation’s key stockmarket index, which broadly tracks the 200 largest listed companies by market value – closed 3.2 per cent lower yesterday.
The result equalled the worst single-day fall on the local bourse 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 that has wiped about $85 billion from the value of Aussie companies and taken the market back to where it was in mid-October.
The average Aussie super fund has also seen all of its gains for 2018 erased, according to analysts.
Equity markets in the US, Europe, Britain and Asia declined sharply over the past two days as the threat of inflation and higher interest rates in the US spooks Wall Street.
The turmoil on the local bourse yesterday came as the Reserve Bank of Australia kept the nation’s cash rate on hold at a record low of 1.5 per cent for the 18th straight month.
All four banking majors lost ground with Westpac down 3.1 per cent at $30.33, and National Australia Bank, the Commonwealth Bank and ANZ giving up 3 per cent each to close at $28.32, $77.40 and $27.88 respectively.
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 with 25 per cent of its portfolio in Australian shares as well as 25 per cent in international stocks would have lost about 2.4 per cent since Monday.
That equates to a $2400 hit on a $100,000 balance.
“Despite the recent poor performance, it is important to remember that balanced funds invest in a range of assets, which offer diversification benefits, so performance is not solely determined by share markets,” SuperRatings market insights manager Camille Schmidt said.
Yesterday’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. SHARE PRICES PAGE 33