ASX tumbles on hot US retail data, fears of Middle East escalation

Shares took their cue from the US stock market, with the local benchmark finishing in the red for the fourth consecutive session.

Australian shares followed Wall Street sharply lower on Tuesday after hot US retail sales data pushed traders to scale back their rate cut bets and fears of escalating tensions in the Middle East weighed on markets.

All 11 industry sectors finished in the red, driving the benchmark S&P/ASX200 index 1.8 per cent lower, or 140 points down, to 7612.5. The broader All Ordinaries shed a similar amount, plunging 147.1 points to 7862.3.

The Australian dollar also dipped to a five-month low of US64.06c, but recovered from some earlier losses by the closing bell.

Describing the market’s performance as “carnage”, IG Australia market analyst Tony Sycamore said the broad sell-off was the result of a “perfect storm”.

“Stretched positioning across global equity indices, a third successive month of firm US inflation data contributing to unease within a deeply troubled bond market” and “the rising risk of miscalculation and escalation in the Middle East,” were among the factors weight on the benchmark, Mr Sycamore said.

Wesfarmers shed 2.3 per cent, JB Hi-Fi slipped 2.9 per cent and Harvey Norman fell 3.8 per cent. Picture: NCA NewsWire / Jeremy Piper

Consumer discretionary stocks were the biggest laggards, diving 2.4 per cent.

Wesfarmers shed 2.3 per cent to $65.14, JB Hi-Fi slipped 2.9 per cent to $60.84, while Harvey Norman fell 3.8 per cent to $4.54.

Material stocks also dived two per cent, tracking a slump in the iron ore price which sank 2.5 per cent on the Singapore Exchange to $US109.40.

The sell-off came even as fresh growth figures from China, the world’s largest importer of iron ore, showed its economy expanded 5.3 per cent in the year to March, blistering past expectations of a 4.6 per cent increase.

Heavyweight miners sank with Rio Tinto off 2.9 per cent to $128.70, Fortescue down 2.8 per cent to $25.03, and BHP sinking 1.8 per cent to $44.97.

Financials were also not spared, with Commonwealth Bank – the nation’s largest retail lender – down 2.1 per cent to $112.44, just ahead of its position at the start of the year.

Outgoing Woolworths chief Brad Banducci was threatened with jail time when appearing before a Senate inquiry. Picture: NCA NewsWire

Of the remaining big four banks, Westpac retreated 2.3 per cent to $24.55, NAB sank 1.7 per cent to $33.36 and ANZ was off 2.2 per cent to $28.36.

In corporate news, Star Entertainment plunged 14.4 per cent to 42c to be the biggest laggard on the benchmark as a second inquiry into its flagship Sydney casino in just 18 months continued to deliver bad news for the embattled gaming giant.

Suncorp skidded 1.3 per cent to $15.83 after flaws in the bank’s stress test were revealed, leading management to file a prudential breach with APRA, the banking regulator.

Investment and superannuation platform Hub24 slipped 2.1 per cent to $39.8 even as it reported $100bn worth of funds under administration.

After its chief executive Brad Banducci was threatened with jail time over contempt at a Senate inquiry into allegations of price gouging, shares in Woolworths fell 1.2 per cent to $31.88.

Originally published as ASX tumbles on hot US retail data, fears of Middle East escalation