About $29 billion has been wiped from the share market’s value in its worst session of 2017, as lower oil prices and a souring outlook for commodities hit energy and mining stocks, and the negative sentiment infected the big banks.
The sharp fall means the market has again surrendered all of its gains for the year.
The benchmark S&P/ASX200 stock index dropped 1.6 per cent to 5,665.7 points, almost exactly where it was at the end of 2016.
The All Ordinaries index shed 1.5 per cent to 5,703.2 points, down from 5,719.1 points at turn of the year.
CMC Markets chief market strategist Michael McCarthy said the market was experiencing increased levels of volatility.
“Volatility continues to be the expectation for the rest of the year – that is calm patches followed by large swings – and we might be entering a new short-term of increased volatility,” he said.
“It’s been a less-than-impressive performance for the index so far this year.”
A sharp drop in oil prices and concerns about over-production hurt energy stocks, but the mining sector was the worst performer on Wednesday.
“There’s a lot of pressure on that sector,” he said.
“This is intrinsic to the commodity outlook, and there’s been a souring of the industrial outlook for the rest of the year.”
Energy stocks Woodside Petroleum, Oil Search, Santos and Origin Energy were between two and 3.15 per cent lower.
BHP Billiton dropped 3.75 per cent to $22.10, Rio Tinto fell 2.9 per cent to $58.00 and Fortescue Metals dumped 4.6 per cent to $4.52.
Commonwealth Bank, Westpac, National Australia Bank and ANZ were not immune to the negative sentiment, falling by between 1.75 per cent and 2.9 per cent.
Insurer QBE plummeted 10.3 per cent to $11.87 after it cut its full-year guidance on the back of higher-than-expected claims from its Asian and Latin American operations.
Bakery, pizza and coffee chain owner Retail Food Group plunged 10.4 per cent to $4.56 after it downgraded its full-year profit growth forecasts.
The Australian dollar also took a hit, mainly due to weaker commodity prices, falling back below 76 US cents.
ON THE ASX:
* The benchmark S&P/ASX200 dropped 91.6 points, or 1.59 per cent, to 5,665.7 points.
* The broader All Ordinaries index dropped 89.1 points, or 1.54 per cent, to 5,703.2 points.
* The September SPI200 futures contract was down 92 points, or 1.62 per cent, at 5,604 points.
* National turnover was 2.3 billion securities traded worth $7.2 billion.
CURRENCY SNAPSHOT AT 1700 AEST
CURRENCY ASK BID PREVIOUS
AUD/USD 0.7568 0.7567 0.7579
AUD/JPY 84.25 84.21 84.47
AUD/EUR 0.68 0.6796 0.6806
AUD/NZD 1.0466 1.0459 1.0464
AUD/GBP 0.6003 0.6 0.6
GOLD:
The spot price of gold in Sydney at 1700 AEST was $US1,244.93 per fine ounce, down $US1.10 from $US1,246.03 per fine ounce on Tuesday.
BOND SNAPSHOT AT 1630 AEST:
* CGS 4.50 per cent April 2020, 1.7709pct, from 1.7888pct,
* CGS 4.75pct April 2027, 2.3919pct, from 2.4184pct
Sydney Futures Exchange prices:
* September 2017 10-year bond futures contract at 97.565 (implying a yield of 2.435pct), from 97.535 (2.465pct) on Tuesday
* September 2017 3-year bond futures contract at 98.18 (1.82pct), from 98.16 (1.84pct).
(*Currency closes taken at 1700 AEST previous local session, bond market closes taken at 1630 AEST previous local session)
