Australian shares slumped to a six-month low today as investors joined a global flight out of risky assets, triggered by fresh concerns over a global economic slowdown after anemic US jobs figures and soft Chinese factory data. Figures show the economy is limping Aussie dollar struggles to lift from lows Europe joins global selloff at the open Zero inflation adds to RBA rate cut case Bond yields hit fresh lows in race to safety US stocks slump after poor jobs numbers
The benchmark S&P/ASX200 index plunged 78.9 points, or 1.9 per cent, to 3985, losing grip on the psychological 4000 level and hitting its lowest mark since November 25. The broader All Ordinaries index lost 83.5 points, or 2 per cent, to 4033.4.
Among the sectors, energy stocks fell 3.3 per cent, materials dropped 2.8 per cent and financials lost 1.7 per cent. Gold miners and telcos were the only two sectors to post gains, adding 2.7 and 0.5 per cent respectively.
The day's losses wiped another $24 billion off the market's value and took the slump since May 1 to 10.4 per cent, meeting the usual definition of a market correction. For the year, the benchmark index is down 1.75 per cent.
US woes weigh on market
Local market players took their cues from a big selloff on Wall Street that was prompted by a weak US jobs report.
IG Markets strategist Stan Shamu said the US jobs data showed it was ‘‘now clear that not all the macro risks are confined to Europe’’.
Heavy losses were posted across the board, with global miner Rio Tinto down 4.7 per cent, steelmaker BlueScope down 9.4 per cent to a record low, and several major retailers losing more than 3 per cent.
"The fear factor in markets has increased. When markets do start falling like this it has a huge impact on investor and consumer sentiment and it makes it problematic for companies themselves," said White Funds portfolio manager Angus Gluskie.
Still, he said policy moves in Europe, China and the US and prospects of fresh rate cuts by the Reserve Bank tomorrow should help underpin sentiment over time.
