Welcome to your five-minute update of the trading day and how the experts are seeing it.
The numbers:The Australian sharemarket has started the week in negative territory,shedding 1.6 per cent in a broad sell-off that inflicted heavy losses on the energy and minerals sectors.
The ASX200 on Monday closed 105.3 points weaker to 6469.4,a three-month low. Energy stocks shed 6.12 per cent,while mining stocks dropped around 5 per cent as commodity prices drifted lower.
The lifters: Healthcare company Nanosonics gained 4.7 per cent;IT provider Megaport moved up 3.62 per cent;and biotech heavyweight CSL pushed up 2.4 per cent,as the healthcare sector outperformed the market.
The laggards:Costa Group slumped 14.17 per cent after the shock departure of its CEO;Whitehaven Coal dropped 14 per cent as investors cooled on coal’s outlook;and Link fell 9.7 per cent after pulling the plug on a proposed acquisition.
The lowdown:Mining and energy stocks led a broad sell-off on the Australian sharemarket,while the pound and Euro crashed to record lows,as the prospect of further interest rate hikes and a US recession spooked investors.
The pound crashed to an all-time low of $1.035 USD in Asian trading on Monday after new finance minister Kwasi Kwarteng unveiled historic tax cuts funded by huge increases in borrowing.
The 4.7 per cent plunge in the pound,most of which happened over 20 minutes,outstripped the decline in the currency following the successful Brexit vote in 2016. The pound is now at more than a 50 per cent chance of reaching parity with the US dollar,which could prompt an unprecedented currency crisis for Liz Truss’ government just weeks into its tenure.
Nick Twidale,chief executive at FP Markets,said the pound’s decline highlighted investor uncertainty around Britain’s economy and the broad strength of the dollar against the major currencies.
“Sometimes the markets react in a positive way to this[stimulus] because there’s more money coming into the economy,but I think it’s seen as a bit of a panic measure,and that’s why it’s gone the other way,” he said.