ASX plunges: ‘Never seen anything like it’

The Australian share market has crumbled further into uncharted territory with the death spiral continuing at the open of trade this morning.

The ASX200 plunged more than 7 per cent in the first 15 minutes, adding to the $551 billion loss since its all-time high reached just three weeks ago.

And after a near-10 per cent crash on Wall Street last night as well as violent falls in Europe, the indicators are forecasting the horror to deepen on our shores.

"We've never seen anything like the intensity and the ferocity of the selling, there's no script to show how aggressive this sell-off has been," Pepperstone head of research Chris Weston told news.com.au.

He said US President Donald Trump's inaction to counter the economic impacts of the coronavirus coupled with his 30-day travel ban to Europe are the main prods for the spiral.

At midday Australian time yesterday, Trump ramped up travel restrictions and was flimsy on details of a promised stimulus package proposed to ease the looming financial crisis.

"He basically bought a pea shooter to a gunfight," Mr Weston said.

"The Trump administration is not delivering shock and awe when the markets really need it.

"They needed to go above and beyond when they had the chance and they disappointed."

 

The Dow Jones crumbled nearly 10 per cent overnight. Picture: AP Photo/Richard Drew
The Dow Jones crumbled nearly 10 per cent overnight. Picture: AP Photo/Richard Drew

 

Burman chief investment officer Julia Lee said the weight of money shedding from the market hasn't been witnessed for more than 30 years.

"It is a historic move we're seeing in terms of the market, it's the worst we've seen since the 1987 stock market crash," she told news.com.au.

"The speed of the losses is unusual but when volatility does spike it tends to cluster, it's just that we're seeing extremely big moves."

 

 

Ms Lee said the market sees big moves both down and up during times of such uncertainty but the trajectory of global stocks is certain.

"In the last couple of weeks, Wall Street has had plus-4 per cent days as well," she said. "And you would expect that in this kind of environment.

"We see big up days but ultimately the down days outweigh and the market continues to go lower until it finds a floor."

THURSDAY'S HISTORIC TUMBLE

Yesterday's falls eclipsed the pain inflicted on Monday, making it the worst day of losses since the Global Financial Crisis.

The ASX plunged 7.4 per cent to 5304.6 by the close on a day 35-year veteran CMC Markets chief strategist Michael McCarthy described as one of the worst he's ever witnessed.

"The global impulse is really cruelling the local market," he told news.com.au. "And the steepness of the falls and the speed of the falls suggest there's more damage to come."

The local index reached an all-time high of 7289.7 on February 20 but has plummeted more than a quarter in just three weeks, amounting to an astonishing loss of half a trillion dollars.

The steep falls were inflicted across the board but the energy and banking sectors were particularly smashed, each down 8 per cent.

Major lenders Commonwealth Bank, Westpac, NAB and ANZ were all between 7.8 and 8.8 per cent lower.

Travel companies remain the worst impacted by the virus and the increasingly severe travel restrictions. Both Webjet and Flight Centre fell nearly 20 per cent, while Virgin Australia was down 16.7 per cent.


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