Investors face another wild ride on the ASX after Wall Street suffers most significant one-day drop since coronavirus crisis began

March 17, 2020 - 2 weeks ago
Share on twitter
Share on facebook
Share on linkedin
Share on email

U.S. stocks fell sharply on Monday, pummelled by coronavirus-fuelled anxiety, with all three of the major U.S. stock market indices plummeting at the opening bell rang.

Just seconds after trading began on Wall Street on Monday, U.S. stocks went limit down as the S&P 500 fell more than -7%. It triggered a 15-minute trading halt as a result.

The S&P 500 and Nasdaq all accelerated their losses late in the afternoon, while the Dow Jones suffered its worst day since the “Black Monday” crash three decades ago when it fell more than -22%. The drop surpassed its -9.99% tumble last Thursday. It was also the Dow’s third-worst day ever; it dropped more than -13% in late 1929.

The S&P 500’s has plummeted nearly -30% since setting a record less than a month ago, and it’s at its lowest point since the end of 2018.

Losses accelerated in the last half hour of trading after President Trump said the economy might be headed for a recession and asked Americans to avoid gatherings of more than ten people.

Apple and Facebook dropped at least -12%, while bank stocks also fell broadly, with Bank of America and JPMorgan Chase both falling at least -15%.

Yesterday, the ASX 200 erased -537.3 points, or -9.7%, and is set for another day of uncertainty as the SPI 200 futures point to an opening loss of -209 points, or -4.1%.

As for the Australian Dollar, our local currency hit a fresh near-12-year low of US$0.6078 and is currently buying US$0.6111 (as of writing).

From the technical assessment, support is viewed from 4,700 and remains in extreme oversold condition.

Weekly outlook on the benchmark S&P/ASX 200

The ASX 200 skids further of the track on Monday, 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 on Monday, 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.

Markets are now on the watch for some similar policy response from the Reserve Bank of Australia (RBA) in the coming days after the RBA announced it would be meeting on Thursday, in order to discuss policy measures to support the Australian economy through the coronavirus crisis.

Yesterday, 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.

Share on twitter
Share on facebook
Share on linkedin
Share on email

Leave a Reply

Close Menu