Local stocks in $56bn wipeout as ASX plunges 2.8pc

The ASX has suffered its worst day in 18 months as more than $56bn was wiped off the bourse.

More than $55bn was wiped off the ASX today. Picture: AAP

Investors wiped $56 billion off the stock exchange on Thursday in what was the worst one-day fall since February last year, as markets reacted to fears of a US recession.

At the close of trade, the ASX benchmark S&P/ASX200 had plunged 187.796 points, or 2.85 per cent to a two-month low of 6408.102 points. The broader All Ordinaries index had tumbled 186.711 points, or 2.8 per cent to 6490.8 points.

The losses were extended after stronger-than-expected jobs data dampened hopes of another rate cut this year.

Stocks fell across all sectors but energy stocks suffered the heaviest falls, dropping 5.3 per cent, followed by tech stocks, which were down 4.9 per cent, and industrials, which fell 3.1 per cent.

The ASX was the worst-performing index in the Asia-Pacific, with the Shanghai Composite down only 0.38 per cent, and the Hang Seng actually edging up 0.2 per cent as the ASX ended the day. Japan’s Nikkei ended the session down 1.08 per cent.

The global sell-off was sparked by an inversion of the US Treasury yield curve, a possible warning sign of a recession, which spooked US markets overnight.

The Dow Jones Industrial Average fell 3.05 per cent in its biggest one-day drop since October, while the S&P 500 dropped 2.93 per cent and the Nasdaq lost 3.02 per cent.

The ASX steepened its decline throughout the session despite S&P 500 futures rising 0.5 per cent in Asian trade, pointing to a higher open for the broader US benchmark on Thursday evening.

“The idea of a flatter US and global yield curves is certainly not a new theme. In fact, it is very mature,” said Pepperstone research head Chris Weston.

“However, the fact the US 10-year Treasury has traded with a lower yield-to-maturity than that of the shorter-term US 2-year Treasury has fully caught the attention of all market participants.

“Lower yields are a sign that US monetary policy is too tight and the market sees a higher prospect of recession.”

BHP dropped 2.8 per cent to $36.39 while Rio Tinto slid 2.7 per cent to $85.60. Fortescue lost 0.8 per cent to $7.50.

In financials, Westpac fell 3.2 per cent to $27.61 while NAB gave back 3.1 per cent to $26.80. Commonwealth Bank skidded 3 per cent to $74.34 while ANZ weakened 3 per cent to $26.23.

Telstra backtracked 1.8 per cent to $3.87 after it booked a 40 per cent drop in net profit for the full-year, highlighting the damage done by the NBN.

Oil producer Woodside Petroleu m plunged 6.7 per cent to $31.18 on disappointing results as it warned of a global recession.

Vitamin maker Blackmores flopped 14.9 per cent to $70.90 after it sheeted home a profit fall to its failure to execute its China strategy.

Meanwhile, QBE lowered 1.1 per cent to $11.95 but still outperformed the market after its half-year profit rose strongly, bolstered by fewer claims losses and an improvement in investment returns.

Packaging company Orora tumbled 15.9 per cent to $2.69 after it flagged challenging market conditions and cost headwinds this year.

Elsewhere Treasury Wine Estates lifted 2.2 per cent to $17.45 after it unveiled it was acquiring a French winery.

Breville fell back 6.5 per cent to $18.13 after the kitchen appliance maker said that adverse changes to the general global economic and geopolitical conditions will impact its financial results in the year ahead.

Super Retail Group gained 4.2 per cent to $9.04 after it delivered a full-year result within consensus expectations.

Sydney Airport shed 3.4 per cent to $8.09 after its full-year result was hit by a massive tax bill issued by the European Union.

The Australian dollar was trading slightly higher on the jobs boost at $US67.82.