ASX sheds $45bn in opening minutes of trade following Wall Street plunge

The Australian sharemarket shed $45bn in the opening minutes of trade on Monday following a horror day on Wall Street.

The Australian sharemarket shed $45bn in the opening minutes of trade on Monday morning following a mass sell-off on Wall Street.

The benchmark ASX 200 dropped by nearly 2 per cent, or 140.7 points, to 6963.4 points. It fell even further in a brutal first three hours of trade to 6951.4 points by 1.04pm.

The broader All Ordinaries also tumbled, falling 2.25 per cent, or 165.6 points, to 7180.2 points by 1.04pm.

The local market tumbled following a dismal Friday session on all three major indices in the US, where investors are spooked by the likelihood of further interest rate rises.

The fall came after more hawkish comments from US Federal Reserve bank chairman Jerome Powell at the Jackson Hole summit of central bankers.

Dashing hopes of a softer approach to monetary policy, Mr Powell said the central bank would maintain its pace of successive rate hikes in a bid to curtail inflation.

The Australian sharemarket shed billions of dollars on Monday morning following a horror session on Wall Street. Picture: AAP Image/Bianca De Marchi

City Index analyst Tony Sycamore said equity market traders had been riding on “hopetimism” there would be a dovish pivot on interest rates in the US.

“The Fed chair was quite open about it. He said, ‘We’re going to cause more pain out there’. He’d said it before and he’s said it again,” Mr Sycamore said.

High growth stocks have been particularly stung by looming interest rate hikes after enjoying a brief but strong boom earlier this year.

“The connection there of course is the fact that tech stocks or high growth stocks are more susceptible to higher interest rate rises,” Mr Sycamore said.

“The bounce was based on hope. The rug’s been pulled from underneath those markets.”

All 11 local sectors were in the red on Monday, with tech stocks faring the worst after falling by 4.44 per cent by 1.02pm.