Aus shares drop 3% after Wall St plunge

Shares have sunk nearly 3.0 per cent early on the Australian market as local investors pulled back following a slide on Wall Street on resurgent worries of virus infections in the US.

The S&P/ASX200 benchmark index was lower by 173.7 points, or 2.91 per cent, at 5786.9 points after the first 15 minutes of trade on Friday.

The All Ordinaries index was 187.4 points, or 3.08 per cent lower, at 5892.1.

Energy stocks were the worst affected, down 5.66 per cent.

Information technology was down 4.12 per cent, financials slumped 3.95 per cent and property slipped 2.82 per cent.

In the US overnight, investors continued selling shares after the US Federal Reserve released its first pandemic-era economic outlook, with Chairman Jerome Powell warning of a “long road” to recovery.

Increasing COVID-19 infection numbers also have investors worried. A new analysis found that in 21 of the 50 US states, the rolling seven-day average of new cases per capita was higher than in the seven days earlier.

All three major US stock indexes lost well over 5 per cent, posting their worst one-day percentage drops since March 16, when markets were sent into freefall by the abrupt economic lockdowns.

The Australian dollar was buying 68.12 US cents at 1015 AEST. That was sharply lower from 69.27 US cents at the close of trade on Thursday amid rising risk aversion among investors.

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