ASX dives after Wall Street bloodbath

The Australian sharemarket took a cue from an overnight bloodbath on Wall Street and tumbled on Thursday to erase a lot of the progress made over the previous four sessions.

The benchmark ASX 200 fell by 118.2 points, or 1.65 per cent, to close at 7064.5 points after inflation fears and poor earnings figures battered the major US indices and handed traders their worst session since 2020.

The broader All Ordinaries dropped by 123.3 points, or 1.66 per cent, to close at 7303.3 points, while the Australian dollar fell below US 70 cents.

The Dow Jones dropped 3.6 per cent, the S&P500 fell 4 per cent and the Nasdaq tumbled 4.7 per cent, which was more than enough to set the ASX 200 up for a poor morning.

There was nowhere to hide on local shores as the market shed as much as $45 billion of value, with the ASX down as much as 2 per cent in early trading.

This was despite labour force data for April released on Thursday confirming Australia’s official unemployment rate has fallen to its lowest level since the 1970s.

The index recovered slightly from its early losses but healthcare was the only one of 11 local sectors to eke out a modest gain by the end of the day.

Imugene, a cancer immunotherapy biotech company, was the best performer on the index with a 17.65 per cent rise to 20 cents.

Healthcare’s biggest players managed small gains which helped lift the sector into the green, with CSL rising 0.33 per cent higher to $274 and Ramsay Health Care up 0.23 per cent to $78.8.

Retail and consumer stocks had a woeful day after investors were spooked by the horrible night on Wall Street, where US retail giant Target plunged a whopping 25 per cent.

On the local index, big consumer names suffered, with Wesfarmers shedding 7.83 per cent to $45.89, Woolworths falling 5.61 per cent to $35.18 and Coles dropping 3.41 per cent to $17.82.

Other big companies in the sector were in the dumps. JB Hi-Fi fell 6.63 per cent to $44.89, Harvey Norman was down 5.46 per cent to $4.33, Super Retail Group dropped 6.03 per cent to $9.35, Flight Centre shed 4.62 per cent to $20.22 and IGA supplier Metcash was down 6.54 per cent to $4.29.

Traders had been clawing back lost ground in recent days after a dire cocktail of inflation fears, rate hike expectations and Chinese Covid-19 lockdowns knocked the index to multi-month lows.

After a positive day on Wednesday, tech stocks also took a turn for the worse. Novonix shed 6.36 per cent to $3.68, Life 360 was down 4.67 per cent, Megaport fell 3.96 per cent to $7.03 and Zip dropped 3.87 per cent to 87 cents. Afterpay owner Block was down 3.22 per cent to $82.06.

The big banks were all down. Westpac sunk 4.05 per cent to $23.45, NAB dropped 1.34 per cent to $30.86, Commonwealth Bank dipped 0.95 per cent to $103.8, ANZ fell 2.17 per cent and Macquarie lost 2.13 per cent to $177.64.