Investors brace as shares slump on global woes
Stockholders took their cues from a jittery Wall Street, which set the gloomy tone by tumbling 2.1 per cent overnight on Thursday to record its worst session for the year.
Banking and healthcare stocks were squarely in the firing line yesterday, losing 2 per cent and 1.9 per cent respectively.
China and Greece added to the drama, with the former presiding over a sharply sliding stockmarket and weakening factory activity, while the resignation of Greek PM Alexis Tsipras means debt-laden Greeks will have to return to a fifth national poll in six years.
North Korean dictator Kim Jong-un also threw investors a curveball after reportedly ordering his troops on to a war footing following a crossborder exchange of artillery fire with South Korea.
The ASX 200 has now lost 8.5 per cent so far this month, set to complete the worst monthly decline since October 2008 when it lost 12.6 per cent during the peak of the GFC.
IG market analyst Angus Nicholson said markets were in panic mode as the full scale of China’s slowdown started to become clearer.
“The phenomenal six-year bull market may finally meet its match in China-induced global deflation,” he said.
Pitcher Partners director of wealth management David Lane said volatility had returned to the Australian market, with heavy hitters such as Commonwealth Bank and ANZ leading the losses. But Mr Lane said the steep declines in the market had been an over-reaction.
“Long-term investors should see the current level of the market as an opportunity to buy quality assets at attractive levels,” Mr Lane said.
Among the worst-hit from the market slump have been “mum and dad investors” in superannuation funds, with funds losing 3 per cent of their value so far in August.