Wall St plunge takes ASX losses to $110b for 2016
The Australian share market has plunged by more 2 per cent in early trade, with losses across the board following a slump on Wall Street overnight.
The early losses were led by energy shares, as global crude oil prices struggled to remain above the crucial $US30 a barrel level, although most sectors were in the red after weak leads from Wall Street.
“There hasn’t been much hard news; it is sentiment-driven trading,” CMC Markets chief analyst Ric Spooner said.
“The markets had run up somewhat before Christmas, so we are basically unwinding those gains.”
He said the index was close to a technical support level and the next few days would be a test of market sentiment.
Earlier, US stocks sank as investors grew anxious about weak energy prices, US corporate earnings and the global economy.
The Dow Jones industrial average closed 2.2 per cent lower.
In the local market, the focus will be on local jobs data, due to be released at 1130 AEDT. The data is expected to show a small rise in the unemployment rate in December to 5.9 per cent, traders say.
Energy and mining share were among the worst affected on Thursday.
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Santos was down 20 cents, or 6.5 per cent, at $2.90, Origin Energy had lost 15 cents to $4.03, while Woodside had slipped 63 cents at $26.80.
Global miner BHP Billiton dipped 20 cents to $14.55, Rio Tinto fell 91 cents to $38.61, and Fortescue Metals lost was six cents worse off at $1.50.
All the four major banks were trading around 2 per cent lower.
Wesfarmers shares were down 60 cents at $39.35 after the Coles and Bunnings owner said it had made a $705 million bid for UK home improvement store chain Homebase.
NEW YORK – US stocks have sunk, pushing the S&P 500 to close below 1,900 for the first time since September as investors grow anxious about weak energy prices, US corporate earnings and the global economy.
All 10 S&P 500 sectors ended in the red, led by consumer discretionary shares, the healthcare sector and technology.
All three major indexes are in correction territory. The S&P 500 is now down 11.3 per cent below its May 21, 2015, closing lifetime high.
At the same time, the Russell 2000 small-cap index dropped 3.3 per cent, putting it in bear market territory. The index is down 22 per cent from its June 2015 record close.
Stocks had started the day higher but sentiment turned negative when a brief rally in beaten-down oil prices stalled. Growing stockpiles of oil in the US stoked market fears about demand.
“We’ve been in capital preservation mode since the year began and as the market has shown an inability to rally with any conviction, that’s only increased the level of nervousness,” said Michael James, the managing director of equity trading at Wedbush Securities in Los Angeles.
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The market has attempted 10 intraday rallies at the outset of 2016, and each one has failed to sustain itself.
The declines ended a two-day rebound for the S&P 500 and resumed the steep selloff that began at the start of the year amid concerns about a slowdown in China and global growth.
The Dow Jones industrial average closed down 364.81 points, or 2.21 per cent, to 16,151.41, the S&P 500 lost 48.4 points, or 2.5 per cent, to 1,890.28 and the Nasdaq Composite dropped 159.85 points, or 3.41 per cent, to 4,526.07.
The CBOE Volatility index, Wall Street’s favorite gauge of uncertainty, gained 12.2 per cent.
Analysts said nervousness about fourth-quarter earnings added to the bearish tone. CSX was down 5.7 per cent at $US22.35 after the railroad reported a lower quarterly net profit, and said the weak global economy and US industrial markets would weigh on results.
“People are concerned about the health of the economy,” said Ken Polcari, the director of the NYSE floor division at O’Neil Securities in New York.
“There’s no catalyst to really take it higher. If you start getting bank and other earnings that are really bad, nothing is going to hold.”
S&P 500 earnings are estimated to have fallen 4.8 per cent in the fourth quarter from a year ago, in a second straight quarterly profit decline, Thomson Reuters data showed.
JPMorgan Chase and Intel report results on Thursday. Citigroup and Wells Fargo are among companies reporting on Friday.
Amazon fell 5.8 per cent to $US581.81 and was among the biggest drags on the S&P 500 and the Nasdaq.
About 9.9 billion shares changed hands on US exchanges, well above the 7.5 billion daily average for the past 20 trading days, according to Thomson Reuters data.
Australian indices and key stocks at the open
Index last move
ASX200 4869.5 -117.94
All ords 4926.4 -115.237
ASX200SPI 4832 -105
Gold US$/o 1092.86 -0.25
AUD/USD 0.6954 -0.0072
Dow Jones 16151.41 -364.81
S&P500 1890.28 -48.4
Nasdaq 4526.07 -259.85
NIKKEI225 17715.63 496.67
NZSE 50 6084.33 -67.54
Key stocks
LAST CHANGE % CHANGE
AMP 5.31 -0.16 -2.93
ANZ Bank 24.97 -0.48 -1.89
BHP Billiton 14.56 -0.21 -1.42
C’wealth Bank 79.24 -1.76 -2.17
News Ltd 18.01 -0.34 -1.85
NAB 27.07 -0.61 -2.2
Rio Tinto 38.51 -1.04 -2.63
Telstra 5.33 -0.1 -1.84
Westpac Bank 30.77 -0.72 -2.29
Woodside Petr 26.865 -0.575 -2.1
Woolworths 22.7 -0.55 -2.37
AAP
