ASX: Blue chips, miners and shares all hit in virus correction

Blue chip shares, miners, tech stocks and property are bearing the brunt of a savage Australian selldown.

Australian shares have continued losses after Wall Street entered a technical correction overnight. Picture: AAP

Blue chip shares, miners, tech stocks and property are bearing the brunt of a savage market selldown that has pushed Australia’s S & P/ASX 200 into correction territory.

At lunch, the benchmark S & P ASX 200 is down 2.83 per cent at 6469.20 to a six month low, and putting it on track for its worst week since the financial crisis.

This followed a wild night on Wall Street amid fears the rapid spread of the coronavirus could put a brake on the global economy.

Tokyo’s key Nikkei index plunged more than 3 per cent at the open on Friday after US and European sell-off. The Dow Jones Industrial Average fell 4.4pc, about 1,186 points, and the Nasdaq Composite slid 4.5pc. The S & P 500 was down 4.4pc.

Locally traders have reported margin calls made on some higher leverage stocks, which involve investors toping up the equity in the share accounts. At the same time blue chips are being sold off across the board.

Among the ASX’s top 50 stocks, none are in positive territory. Hardest hit is healthcare operator Ramsay Healthcare which is off 6.3 per cent. Iron ore miner Fortescue Metals is down 6 per cent and Newcrest is off 5.6 per cent.

Elsewhere AMP is leading financials down 4.8 per cent and National Australia Bank is off 3.8 per cent. Woodside is down 4pc after oil prices dived. Macquarie Group is also off 3.8 per cent. Tech darling Afterpay – which sits in the ASX 100 – is down 8 per cent,

“In these types of markets “the good the bad and the ugly” all get sold down heavily as investors reduce their overall exposure to the equity market,” said Investors Mutual investment director Anton Tagliaferro.

Elsewhere, listed property groups have been hammered in early morning trade, following a rout that hit the US REIT sector overnight.

ASX/S & P 200 property index was down 3.5 per cent at 11am with growth stocks Charter Hall and Goodman Group among those hit.

Charter Hall was down 4.8 per cent to $12.35 and Goodman was down 3.3 per cent to $15.04, partly unwinding earlier gains this week.

Meanwhile, regulators in Australia are reviewing plans for stresses on the financial system.

The Australian Prudential Regulation Authority has asked banks, insurers and super funds to prove they have “adequate plans in place” to continue to operate in the face of the growing threat of a coronavirus pandemic.

ASIC executive director of markets group Greg Yanco said the regulator was making sure the market could operate, although he said the economic impact of the COVID-19 virus was uncertain.

“Precedence suggests it could be short lived,” Mr Yanco said.

Mr Yanco said a number of market institutions had tested financial market infrastructure if their organisation needed to move to another site or have staff working from home.

“We haven’t had any points of failure. We’re confident that if there is an escalation in our region the market participants will be ready for it,” Mr Yanco said.