ASX plunges by $24b, following weak leads from Wall St
The Australian share market has tumbled into a sea of red, with a broad-based sell off led by a dumping of financial and resource stocks.
Market snapshot at 12:30pm (AEST):
- ASX 200 -1.5pc at 5,699, All Ords -1.4pc at 5,750
- AUD: 79.6 US cents, 60.89 British pence, 68.17 euro cents, 88.44 Japanese yen, NZ$1.06
- US: Dow Jones +0.4pc at 21,797, S&P 500 -0.1pc at 2,475, Nasdaq -0.6pc at 5,917
- Europe: FTSE -0.1pc at 7,443, DAX -0.8pc at 12,212, Eurostoxx50 +0.1pc at 3,493
- Commodities: Brent crude -0.1pc at $US51.45/barrel, spot gold flat at $US1,258/ounce, iron ore -0.3pc at $US70.20/tonne
The All Ordinaries index has fallen 1.4 per cent to 5,750, losing $24 billion in value, while ASX 200 has shed 1.5 per cent to slip below 5,700.
How are Aussie shares performing?
Of the top 200 companies, 171 were sold off this morning, which is 85 per cent of the companies making up the ASX 200 index.
The only sector making slight gains is telecommunications, with Telstra shares up 0.2 per cent to $4.13.
Every other sector is in retreat, with healthcare, industrials and financials all being punished.
When the banks put in weak performances, it tends to drag the entire local share market down — financials comprise about 40 per cent of the ASX 200.
This is one of those days for Australia’s big four: CBA [-1.6pc], Westpac [-1.9pc], NAB [-1.9pc] and ANZ [-2.1pc], while Macquarie Group has suffered the sharpest decline [-2.5pc] despite reaffirming its $2.2bn profit guidance yesterday.
BHP and Rio Tinto are down 1.6pc and 1.2pc respectively.
The worst performing stocks are Webjet [-8pc to $11.66], followed by A2 Milk [-4pc to $4.03].
Most sectors on the ASX 200 sectors are in negative territory on July 28, 2017 (at 11:00am AEST) ((Supplied: Thomson Reuters Eikon))
Only 15 of the top 200 stocks have made gains so far — led by Fortescue which bucked the trend in other miners to be up 3.2pc to $5.40 after posting strong quarterly results underpinned by another significant bout of cost-cutting.
The Australian dollar has also fallen below the $US0.80 mark after a rebound in the US dollar overnight.
But at 79.75 US cents at 1pm (AEST), it was still sitting near a two-year high.
What happened on Wall St?
It was a mixed day for Wall Street, with sharp plunges for the technology sector and fresh records for the Dow Jones.
The Nasdaq snapped its three-week winning streak, as investors took their profits following strong earnings from companies in the tech space.
One of the hardest hit tech companies was US President Donald Trump’s favourite social media platform, Twitter.
Tech stocks drag down Wall Street as Amazon and Twitter’s earnings disappoint. (Reuters: Mike Segar)
Twitter’s shares plunged more than 14 per cent after it reported — to the disappointment of investors — stagnant monthly active user (MAU) growth.
Twitter had 328 million average MAUs between April and June, unchanged from the previous quarter.
The company also reported its revenue fell 4.7 per cent to $US573.9 million, and did not expect it to pick up in the second half of the year.
Although the social media platform is popular with celebrities and public figures, Twitter has had difficulty sustaining its user growth.
It faces stiff competition for advertising revenue from rivals Facebook and Snapchat.
The other major tech stock to disappoint was online retail giant Amazon — its share price slumped by 2.4 per cent in after-hours trade to $US1,046.
This follows the company’s announcement of its 77 per cent drop in quarterly income.
Amazon also predicted a potential operating loss in the current quarter as it invests heavily in video content and fast-growing economies like India.
Before the price slump, Amazon CEO Jeff Bezos briefly overtook Microsoft founder Bill Gates as the world’s richest man — according to Forbes magazine.
Since the start of the year, its shares have risen almost 41 per cent.