Sell-off strips $34.5bn from shares

The Australian sharemarket has endured its fiercest sell-off since the shock Brexit vote in late June.

The S&P/ASX 200 Index yesterday had its fourth-worst ­session for the year. Picture: Liam Kidston

The Australian sharemarket has endured its fiercest sell-off since the shock Brexit vote in late June, with $34.5 billion sliced from shares as traditional, high-yield stocks, including banks, property trusts and Telstra, were dumped.

The S&P/ASX 200 Index yesterday had its fourth-worst ­session for the year, falling 2.24 per cent, or 119 points, to 5219.6 points — its lowest level in nine weeks — as stocks across Asia tumbled.

The selldown spread as markets fretted about the increasing prospect of a US rate rise this year and concerns about the dimin­ished ability of central banks to prop up markets. Unusually, bond markets were also sold down in line with shares — including Australian 10-year bonds — exposing investors in these traditional havens to greater volatility. Sharemarkets in Asia were sold off heavily, while European markets opened weaker.

The share slide added to an ­already bearish mood, with the S&P/ASX 200 turning negative for the year.

Across the past three weeks, the local sharemarket has slumped 6 per cent, and at the heart of the retreat have been some of the nation’s biggest blue-chip names — Telstra and Commonwealth Bank.