The Australian share market has suffered its biggest two-day sell-off in more than two years as investors feared the American economy sinking into recession.
The first Japanese interest rate rise in 17 years has also hit tech stocks because investors had to continue borrowing the yen to buy American shares.
Jessica Amir, a market strategist with Moomoo, said technology stocks were bleeding as investors also worried about the United States, the world’s biggest economy, plunging into recession.
‘The US market is probably going to have manic Monday,’ she told Daily Mail Australia.
The first hour of trade on Monday saw the benchmark S&P/ASX200 index plunge by 2.7 per cent to 7,729.2, as the broader All Ordinaries dropped or 2.8 per cent, to 7,946.9.
It followed the ASX finishing 2.11 per cent lower on Friday, meaning a 4.8 per cent dip for the bourse over the past two days of trading.
Tech stocks were the worst performers with Block Inc, previously known as Square, diving by 9.6 per cent to $90.50 by lunchtime as buy now, pay later app Zip fell by 7.2 per cent to $1.75.
AMP chief economist Shane Oliver said investors were worried the US Federal Reserve would be cutting interest rates too late to ward off a recession.
The Australian share market has suffered its biggest two-day sell-off in more than two years as investors feared the American economy sinking into recession
‘I think we’re in a fairly messy position here,’ he told Sky News.
‘It looks to me like the inflation scare we saw earlier in this year in the US and more recently in Australia, has unnecessarily delayed monetary easing.
‘And now, of course, the financial markets are starting to worry about that higher risk of recession.’
On Wall Street, the Dow Jones Industrial Average fell by more than 1.5 per cent on Friday, while the S&P500 slipped 1.84 per cent, after US unemployment jumped to a near three-year high of 4.3 per cent.
Jessica Amir, a market strategist with Moomoo, said technology stocks were bleeding as investors also worried about the United States, the world’s biggest economy, plunging into recession
Every ASX sector was in the red in early trading, with IT stocks leading the way down at 4.5 per lower.
BHP was down 2.2 per cent, while the Big Four banks were between 3.4 and 3.9 per cent lower.
Monday’s hiccup amounted to the biggest two-day fall since the ASX plunged 4.28 per cent over June 14-15, 2022, amid anticipation of super-sized US central bank rate hikes.
