Rout sees share market lose $85 billion

INVESTORS have stripped $85 billion from the value of the Australian share market in a swingeing two-day rout as investors take their cues from Wall Street and storm the exits.

The ASX 200 – the nation’s benchmark index, which broadly tracks the 200 biggest listed companies – closed 3.2 per cent lower yesterday in its biggest one-day fall for more than two years.

That result was the worst single-day fall for the Australian bourse since June 2016, when the British people shocked financial markets across the globe by voting to leave the European Union.

Key equity markets in America, Europe, Britain and Asia have all declined sharply over the past two trading days as the threat of inflation and higher interest rates in the US spooks Wall Street.

The turmoil on the Australian market came as the Reserve Bank kept the nation’s cash rate on hold at its all-time low of 1.5 per cent for the 18th straight month.

Over the past two days, the bourse has shed 4.75 per cent in a rout that has wiped out four months of gains, taking it back to where it was in mid-October.

The sell-off has been broadbased, hitting all major bluechip companies, with more than $56 billion wiped off their value yesterday alone.

It came after the Dow Jones Industrial Average – Wall Street’s oldest index – shed 1175 points overnight Monday in its biggest one-day point decline yet.