The largest one-day Wall Street free-fall in history has led to chaos on the Australian stock market as the ASX dropped $30 billion on Monday alone.
The American market plummeted after a rapid rise in interest rates combined with a long overdue market correction.
The trickle-down effects saw the Australia Stock Exchange drop nearly 3 per cent in early trading on Tuesday, with investors continuing to pull tens of billions out of the sharemarket.
The largest one-day Wall Street free-fall in history has led to chaos on the Australian stock market as the ASX dropped $30 billion on Monday alone
The American market plummeted after a rapid rise in interest rates combined with a long overdue market correction
Tuesday’s steep decline saw the S&P/ASX 200 index fall 174 points, the worst single-day loss since September, 2015.
Wall Street slumped more than 1100 points or 4.6 per cent on Tuesday (AEDT), extending Friday’s hefty drop amid inflation concerns potentially forcing a quicker pace of interest rate rises by the US Federal Reserve.
The Dow Jones tumbled more than 1500 points at one stage during a frantic trading session.
Market analyse Ben Le Brun described the situation as a ‘bloodbath’, revealing not a single stock opened in a stronger position after the Wall Street turmoil.
‘Wall Street has had an appetite for stocks for years on end so it has just been going up in steps and now we are looking at nothing more than a pullback,’ he told The Australian.
‘So, of course, there is fallout here in Australia.’
Wall Street slumped more than 1100 points or 4.6 per cent on Tuesday, extending Friday’s hefty drop amid inflation concerns potentially forcing a quicker pace of interest rate rises
Treasurer Scott Morrison says the Wall Street dive is a reaction to the latest wage data and bullish sentiment about inflation in the US.
He told reporters in Canberra the market was reacting to last week’s US wage data and more bullish sentiment about what’s happening with inflation and its impact on bond markets.
‘Markets are volatile – when they recalibrate in relation to events like this you do see a bit of these events happening,’ Mr Morrison said.
‘But people who watch these markets more and participate in them more closely than I do, I think, will see this for what it is and understand the forces behind it.’
Share market volatility aside, Trade Minister Steven Ciobo says the Australian economy is behaving ‘exceptionally strongly’.
‘We are seeking really strong economic growth in Australia. We are seeing great employment creation,’ he told Sky News.