The Australian share market has dived for a second straight day, losing $49 billion in value amid a rout of global equities.
The benchmark S&P/ASX200 index dropped 146.9 points, or 2.21 per cent, to 6,493 points, while the broader All Ordinaries was down 141.6 points, or 2.1 per cent, to 6,611.7 points.
Markets around the world plunged after the US announced new import tariffs on products from Europe, and private payroll figures from ADP showed hiring in the United States had declined in September.
“It’s maybe a realisation of the risks we’ve been looking at for the last few months,” said X-Chainge founder Nick Twidale, who has been predicting a crash for several months.
“Maybe the trend is down and we’ve seen the highs for the year.
“It’s not great for global investors, but maybe it’s the correction the market needed.”
The sell-off could be orderly from here, “but if everyone starting running for the door at the same time, it could get really nasty pretty quickly,” Mr Twidale said.
Despite this week’s losses, so far the ASX is still up 15.0 per cent for the year, having gained nearly $300 billion in value.
But every sector was down at least 1.0 per cent on Thursday, with losses exceeding 2.0 per cent in seven of the 11 sectors.
Telecom shares were the worst hit, down 3.0 per cent, as Telstra dipped 3.4 per cent to $3.40.
All of the big banks were down considerably, with Commonwealth falling 2.8 per cent to $77.34, NAB down 3.5 per cent to $28, Westpac down 2.4 per cent to $28.50 and ANZ down 2.7 per cent to $27.30.
In the heavyweight material sector, BHP dipped 3.2 per cent to $35.15 and Rio Tinto fell 4.2 per cent to $87.25.
Goldminers were higher as the price of the yellow metal climbed back to just over $US1,500 an ounce, with Newcrest rising 2.8 per cent, Northern Star up 3.5 per cent and Saracen Minerals up 4.1 per cent.
Webster was one of the only other bright spots, soaring 52.8 per cent to $1.94 after the agribusiness agreed to be purchased by PSP Investments, an investment firm that manages pension funds for Canadian public sector employees.
Among blue-chip shares, Macquarie dropped 2.8 per cent, Wesfarmers fell 1.7 per cent, CSL dropped 2.4 per cent and Woolworths fell 2.2 per cent.
Losses were lightest in the industrial, consumer discretionary, utilities and property trust sectors – although still considerable at between 1.9 and 1.0 per cent.
After the sell-off began on Wednesday with weaker than expected US manufacturing data for September, Mr Twidale said the next risk for global equities was that US non-farm payroll figures set to be released on Friday night (Australia time) would also disappoint.
IG market analyst Kyle Rodda said there was no conclusive evidence the US economy “is about to fall off a cliff” – but given the uncertainty, it made sense for traders to sell now and consider the big questions later.
The Aussie dollar is buying 67.05 US cents, up from 67.02 US cents on Wednesday.
ON THE ASX:
* The benchmark S&P/ASX200 index closed down 146.9 points, or 2.21 per cent, at 6,493 points.
* The All Ordinaries closed down 141.6 points, or 2.1 per cent, to 6,611.7 points.
* The SPI200 futures index was closed down 141.5 points, or 2.1 per cent, to 6,611.7.
CURRENCY SNAPSHOT AT 1630 AEST
One Australian dollar buys:
* 67.05 US cents, from 67.02 US cents on Wednesday
* 71.88 Japanese yen, from 72.18
* 61.27 euro cents, from 61.37 cents
* 54.65 British pence, from 54.66 pence
* 107.15 NZ cents, from 107.33 cents.