Stocks plunge deep into correction territory as $50bn wiped off bourse following Wall St tumble

The ASX has plunged deep into correction territory, with steep losses across the board as the main index tumbles almost 3pc.

The local market was a sea of red this morning. Pic: AAP

The Australian sharemarket has plunged to its lowest level in over a year as investors wiped $50 billion off the local bourse, amid simmering geopolitical tensions and disappointing US earnings.

At the close of trade, the benchmark S&P/ASX200 had tumbled 164.924 points, or 2.83 per cent, to 5664.102 points. The broader All Ordinaries index had dived 167.022 points, or 2.82 per cent, to 5759.5 points.

The market was down almost 11 per cent from its August peak, entering a technical correction for the first time since the current bull market began in early 2016.

It came as markets around the region plunged following a heavy sell-off on Wall Street overnight when the Nasdaq clocked its worst day in more than 7 years after it plunging 4.4 per cent.

The Dow Jones Industrial Average lost 2.4 per cent and the S&P 500 ended the session 3.1 per cent lower.

Bell Direct equity analyst Julia Lee said there was no single trigger for the sell-off in US markets overnight.

“There is a lot of volatility across markets, investors seem to be taking a cautious stance ahead of the midterm elections which are now only a couple of weeks away,” she said.

“There weren’t a lot of places to hide in the Australian market, every sector traded lower.”

At about 4.20pm (AEDT), markets around the region were trading sharply lower.

The Shanghai Composite had slid 1.51 per cent while Japan’s Nikkei had dived 3.33 per cent, the Hang Seng was down 2.02 per cent and Korea had shed 2.41 per cent.

BHP lost 3.96 per cent to $30.80 while Rio Tinto is down 4.5 per cent at $73.52.

Fortescue fell 5.7 per cent to $3.64 after it reported an 8.6 per cent fall in first-quarter iron ore shipments as pollution curbs in China reduced the demand.

In financials, Commonwealth Bank stepped back 2.38 per cent to $65.27 while Westpac turned down 2.49 per cent to $25.84. NAB backtracked 2.5 per cent to $24.53 while ANZ eased 2.55 per cent to $24.80.

AMP had $2.26bn wiped off its market capitalisation, tumbling 24.47 per cent to $2.50 on the back of an announcement it would sell its wealth protection and mature businesses London-based Resolution Life for $3.3 billion and an update about fund outflows.

Natural health company Blackmores reversed 5.4 per cent to $119.50 after it told the market it’s expecting continued growth for the full-year, as it delivered a first-quarter net profit after tax up 7 per cent on the prior year to $16.5 million.

Bellamy’s extended Wednesday’s 6 per cent loss after it flagged a fall in first-half sales. Shares in the company ended the session 6.02 per cent lower at $7.50.

Qantas plunged 4.63 per cent to $5.36 after it booked a record revenue for the first quarter.

Meanwhile electronics retailer JB Hi-Fi stepped back 2.93 per cent to $22.88 as it revealed a flat first quarter for its Good Guys chain but reaffirmed its full-year sales guidance for the JB Hi-Fi chain.

Super Retail Group lost 10.20 per cent to $7.48 on broker downgrades.

Energy was one of the worst performing on a weaker oil price.

Oil Search shed 1.38 per cent to $7.87 while Santos gave back 1.63 per cent to $66.65. Woodside Petroleum was cut by 2.04 per cent to $33.60 while Origin Energy slid 2.88 per cent to $7.09.

Gold stocks were mixed as investors looked to safehaven-linked equities.

St Barbara lifted 1.9 per cent to $4.29 while Resolute Mining rose 3.41 per cent to $1.06.

Evolution Mining put on 0.63 per cent to $3.19 while Regis Resources put on 2.51 per cent to $4.50. Northern Star weakened 1.06 per cent to $9.33.

The Australian dollar was trading slightly lower at US70.75 cents in late trade.

It came as prudential regulator Wayne Byres warned a sharp correction was “possible”, with Australian stocks vulnerable to offshore risks.

Today’s tumble follows steep falls on Wall Street overnight, which confirmed a correction for the Nasdaq and erased theDow and S&P 500’s gains for the year amid disappointing earnings, economic growth concerns, a spat between Italy and the European Union and the killing of a Saudi journalist.

The dive also continues the ASX’s worst month in more than three years, the market now down more than eight per cent for October — and 10 per cent since August — edging ever closer to an 18-month low of February 2016 in its fifth straight session of losses.

The US losses, which followed an uneven day for equities in Asia and Europe, came after another round of mixed US earnings that exacerbated fears about slowing profits.

But earnings have only been one factor that has hung over US markets in recent weeks.

The expectation the Federal Reserve will continue to raise interest rates also has buffeted stocks this month, alongside anxiety over the fallout from the murder of Saudi Arabian journalist Jamal Khashoggi and an ongoing budget dispute between Italy and Brussels.

A US data report showed home sales fell to their slowest pace in nearly two years, while a Fed report illustrated how firms nationwide are worried about the rising hit from tariffs and widespread labour shortages.

Adding to the sense of unease were a series of mail bombs and suspicious packages sent to prominent Democrats, critics of President Donald Trump, including former President Barack Obama and Hillary Clinton, less than two weeks before the midterm congressional elections.

Jack Ablin, chief investment officer at Cresset Wealth Advisors, said the selling appeared to be “emotionally” driven sincethere has been no sign of tightening credit, or other manifestations of a slowing economy.

“Perhaps it’s just a ratcheting up of chaos,” he said.

In the end, the Dow Jones lost 2.4 per cent to close at 24,583.42, a single day loss of more than 600 points.

The tech-rich Nasdaq Composite Index plummeted 4.4 per cent to finish at 7,108.40, posting its worst day since 2011.

With AAP, AFP