From The Sydney Morning Herald:
Australian stocks have plunged by more than 4 per cent, losing about $50 billion in value, as carnage on overseas markets spread to the local bourse amid fears the world could tailspin into a new recession.
Around midday, the benchmark S&P/ASX200 index was down 185.5 points, or 4.65 per cent, at 3800.6, after sinking as low as 3765.9, while the broader All Ordinaries index had slumped 192.6 points, or 4.75 per cent, to 3864.1.
- Dollar drops below parity
- Big banks cut fixed mortgage rates
- Wall Street: US stocks hammered
- Michael West: Market looking cheap
- Mal Maiden: Bargain hunters beware
Added to the $135 billion lost since last Tuesday when the selloff began local shares have shed nearly $200 billion in value. The Australian market is now down more than 20 per cent from its recent peak in April, which is the usual definition of a bear market.
The dollar joined the rout, sinking as low as 99.98 US cents, down from $US1.0221 late in New York, as investors bet on a rate cut at the RBA's next meeting early September. The Aussie has lost more than 9 per cent in little over a week, quashing any thought that it might be a new safe haven.
Other regional markets opened sharply lower too, with Japan's Nikkei index losing 3.6 per cent, or 324.08 points, to 8773.48.
Austock Securities senior client adviser Michael Heffernan said the fall in Australian stocks was bigger than expected.
‘‘Objective fundamentals have been thrown out the door - people are making decisions on sentiment and emotion, and there’s a bit of margin selling too,’’ he said. ‘‘You’re going to see more until there’s a catalyst to turn it around.’’
Mr Heffernan said blue chip stocks were suffering as were stocks with lower liquidity, which tend to be smaller stocks.
‘‘There’s blood all over the place,’’ he said.....read on
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