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Yesterday was the worst trading session since May 2020, as we saw heavy losses that haven’t been since around the beginning of the pandemic. Billions were wiped from the market yesterday, with the ASX200 falling 5.3% in the first 20 minutes of the session, then very slightly recovering some of those losses. The market still closed 3.6% lower at 6,686 points. The reason behind this was the heavy selling we’ve seen in US markets over its last two trading sessions. And this was the first time the Australian market was able to respond, since our local market was closed on Monday for the Queen’s Birthday public holiday. The reason US markets have tumbled is because its inflation reading came in higher than expected. Now, on Thursday the Fed will announce its interest rate decision and these inflation numbers have increased the chances of the Fed raising rates more aggressively.
As the Australian market caught up to the US yesterday, all 11 sectors saw heavy losses. The sectors that declined the most were energy, tech, materials and financials. The major banks also continued to fall. Yesterday CBA was down 2.8%, Westpac down 3.7%, NAB down 4.4% and ANZ is down 4.6%.
The worst performing stocks were tech giants Block (ASX:SQ2) and Zip (ASX:ZIP), which we know are sensitive to interest rates. And some of the major mining stocks were also being sold, including Chalice Mining (ASX:CHC), Paladin (ASX:PDN), Champion Iron (ASX:CIA) , Nickel Industries (ASX:NIC) and Fortescue Metals (ASX:FMG). There were only a handful of stocks that managed to gain yesterday. The best performer was PolyNovo (ASX:PNV), followed by Domino’s Pizza (ASX:DMP).
Overnight, US equities saw little change, as investors await the Federal Reserve’s meeting on Thursday. The Dow is down 0.5%, the S&P500 is down 0.4% while the Nasdaq ended slightly higher, up 0.2%.
What to watch today: