After Tuesday’s out of kilter 1.06% rise without a lead Monday from a holidaying Wall Street, the ASX 200 lost that and more when reality hit on Wednesday.
The ASX took a lead from a rise in European markets on Monday. That was only a temporary fillip.
Given the falls on Thursday and Friday with Nasdaq and big tech stocks losing 3.3% last week alone, the absence of a guide from the biggest market in the world was always a big risk.
The big falls on Tuesday, with Nasdaq down more than 4% and into correction territory in just three days (a fall of 10% or more from the most recent peak) was a big wake up call.
That Tuesday’s bounce came after last Friday’s nasty 3.1% fall was quite astounding.
Adding to the pressure was a sharp fall in global oil prices of between 5% and more than 7%. Brent crude dipped under $US40 a barrel and this triggered a slide in energy stock in the US and elsewhere.
Oil prices fell further in Asian and early European trading last night.
And the ASX quickly took the hint, slumping at the start and not going anywhere but staying down all day.
The ASX200 closed fell 2.15% to end at 5,878.6, while the All Ordinaries Index slumped 2.12% to 6,058.9. That’s a 10 week closing low for the market.
Also hitting confidence yesterday was news that UK-based AstraZeneca had halted a trial of a promising COVID-19 vaccine trial to illness in a trial patient.
That saw shares in CSL, a possible Australian partner to provide the vaccine fall 2.49% to $281.
Oil Search slumped 7.8% to $2.96, Beach Energy lost 9.2% to $1.33 and Woodside was off 4.4% at $18.36.
Local buy now pay later companies followed the US tech sector fall, with Afterpay lost 1.3% to $74.05 and Zip Co losing 2.07% to end at $6.61.
The banks though proved to be a big drag on the index with solid losses.
ANZ dropped 3% to $17.81, Commonwealth Bank fell nearly 2.5% to $66.79, National Australia Bank lost 2.57% to $17.44 and Westpac slid 3.34% to close at $17.07.
Among the big miners Rio Tinto eased 0.2% to $99.08, BHP fell 1.7% to $36.78 and Fortescue slipped 2.7% to $18.
Not even positive news about Australian iron ore exports to China in August could help the big three miners.
