Wall Street slides, Asia and Europe follow, billions of value wiped off shares, especially tech stocks of all sizes, analysts got nutso, should we be worried?
Nah, we’ve seen it all before and as recently as February when we had the last big sell-off.
Factors such as rising US interest rates have had an impact (but rates have been around these levels earlier this year and shares rebounded), but the big factor is the overstretched valuations for the megatechs in the US and China especially.
Wall Street had its worst day in 8 months on Wednesday – we followed yesterday with a 2.7% 166 point fall in the ASX 200 to 5,883.80, Around $50 billion was cut from the value of the Australian market in the rout.
The fall left the ASX 200 down 2.9% so far this year and 4% in the past month.
That fall though in Australia was sedate (if it can be described that way) with falls of more 3% and 4% seen on bourses across Asia and a 3.1% tumble in the Dow and 4% for the Nasdaq.
Japan’s Nikkei lost nearly 4% and the Shanghai Composite Index was off more than 5%. Hong Kong’s Hang Seng shed 3% for another in a growing number of down days. Taiwan stocks fared even worse, with the down 5.7%, putting it at its lowest levels since May last year.
European markets were also selling off last night with losses of 1% or more in early trading.
Megatechs like Amazon, Netflix, Apple, Alphabet, Microsoft, and Facebook all fell 4% or more on Wall Street and local tech wannabees felt the sell-off here.
Information technology shares were down more than 4% as a group. Xero dropped 6.2% to $42.52 and Wisetech Global 10.4% to $16.43.
Shares in Appen fell 10.3% to $11.25, Altium dropped 7.9% to $22.15 and NEXTDC finished at $6.29, down 2.9%.
CSL shares lost 3.3% to $185.50. Mayne Pharma fell 6.4% to $1.18 and Nanosonics closed 7.3% lower at $3.17.
Afterpay — which plays as a tech stock and in the retail sector — was down 11% to $13.76. It was at nearly $18 in late August.
The banks were hit – Macquarie fell 6% to $115.49, the ANZ 3.2% to $26.01, the NAB 2.5% to $26.00, Westpac 2.5% to $26.29 and the Commonwealth Bank 2.8% to $67.00, a five-year low.
And the major miners didn’t escape (bar one) BHP was down 3.8% to $33.40 and Rio Tinto fell 3.2% to $76.61. But Fortescue Metals went against the trend, adding 2.4% to close at $3.76, after announcing a $500 million buyback (see separate story.
Among media companies, Nine was down 3.2% at $2.10 and Seven West Media 2.6% top $0.94.
With oil prices weaker despite a hurricane in the US, crude dipped and Woodside Petroleum lost 3.6% to close at $36.65, Santos fell 5.6% to $6.97 and Beach Energy slumped 6.8% to $1.85.
Gold edged higher and so did some leading miners in the sector
Resolute Mining shares rose 2.5% to $1.02, St Barbara shares jumped 6.3% to $3.73, Saracen Mineralsl rose 3.1% to $2.01 and Evolution Mining closed at $2.88, up 6.3% on anews of a new mine development in WA.
