The ASX 200 skids further of the track even though the U.S. Federal Reserve hit the “emergency button” for the second time on Sunday and announced they were dropping its benchmark interest rate to zero and launching a new round of quantitative easing.
The new U.S. Fed Funds Rate, used as a benchmark both for short-term lending for financial institutions and as a peg too many consume rates, will now be targeted at 0%-0.25% down from a target range of 1% to 1.25%.
In contrast, in a surprise move earlier today, the Reserve Bank of New Zealand (RBNZ) announced a 0.75% rate cut to 0.25% – an all-time low – that will be in place for the next 12 months.
With the equity shrugging off the cuts, the benchmark S&P/ASX 200 index finished down -537.3 points, or -9.7%, to 5,002, and surpassed the -8.3% loss posted back on October 10, 2008, during the height of the global financial crisis.
The ASX200 has now lost over a whopping -40% of its value since the peak at 7,197 on 20th Feb 2020.
The broader All Ordinaries index meanwhile dropped -532.5 points, or -9.52%, to 5,058.
The financial sector was down -11.1% as the “Fab Four” (banks) plummeted back to the 2009 lows with ANZ falling the most of $16.78 after losing -10.27% and settled at $16.87.
Meanwhile NAB dropped -10.24% to $16.43 and settled at $16.52, while Westpac dropped -9.49% to $16.25, and settled at $16.40 with the Commonwealth dropping -7.87% to $60.63, its lowest level since 2012 and settled at $61.135
CSL fell -10.35% to $281.34 and Cochlear plummeted -19.3% to $174.51.
In the heavyweight mining sector, Titans, BHP sunk -5.7% to a three-year low of $25.20, while Rio Tinto dropped -4.3% to a two-year low of $77.65.
Meanwhile, the A2 Milk Company, Coca Cola Amatil and Treasury Wine Estates also weighed on the ASX, while supermarket giants shook off the losses.
Coles lost just -1.06% and Woolworths -1.97%. Metcash, which owns IGA, lost -0.82%.
Star Entertainment was the worst hit on the Index after plummeting -23.57% to an all-time low of $2.01.
Just three of the ASX200 were in positive territory, including Telstra, which rose +1.81% to $3.38, while (Dreamworld owner) Ardent Leisure nose-dived -52.05% to an all-time low of $0.175.
As for the Australian Dollar, our local currency hit a fresh near-12-year low of US$0.6094 and is currently buying US$0.6150 (as of writing).