The ASX has tumbled by 2.8 per cent in early trade.

The ASX has tumbled by 2.8 per cent in early trade.Credit:Louie Douvis

The lifters:There were very few stocks to come out of today’s bloodbath unscathed:Stock transfer company Computershare added 1.02 per cent;Whitehaven Coal gained 0.71 per cent;and investment company Infratil gained a modest 0.36 per cent.

The laggards:Lynas Rare Earth lost around 5 per cent;Bathroom supplies company Reece dropped 4.98 per cent;accounting software Xero slipped 4.88 per cent;and PC software company Altium shed 4.71 per cent.

Elsewhere,Lithium company Lake Resources’ shares sunk 16.54 per cent amid news of a dispute with its collaborator for its Kachi Pilot plant.

The lowdown: Sharemarkets tumbled across the globe on Wednesday amid a realisation that inflation in the world’s largest economy isn’t slowing as much as hoped. US inflation data for August came in higher than the market expected overnight,which triggered investor fears of more drastic interest rate hikes by the Federal Reserve,triggering the biggest drop on Wall Street since June 2020.

All 11 sectors on the local bourse closed in the red on Wednesday,with real estate providing the main drag,down around 4.16 per cent. Financial stocks also fell 2.86 per cent,with all four big banks declining for the first time in five days.

“Everyone’s a bit worried,” said Elio D’Amato,founder of investor advice service Spotee Connect. “It’s just the shoot first,ask questions later ... The biggest fall in three months is always going to be unnerving on market open.”

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Russel Chesler,head of investments and capital markets at VanEck,said US futures remain at risk to further sell-offs. “We are still very much in a bear market,and there are still numerous downside risks,” he said.

Chesler noted that the balance sheets from many global companies will come under pressure,as they refinance their debt from historically low levels to match today’s increasing interest rates.

“While commodity prices such as oil have fallen from recent highs,they are still elevated compared to levels before the pandemic.”

“We believe that Australia’s share market is likely to continue outperforming the US share market;we may not see Australian official rates rise as much as US rates as our inflation rate isn’t quite as high.”

In other news,ABS data released today showed a 2.5 per cent increase to the total number of jobs this quarter,with work hours increasing to 2.9 per cent. Job vacancies reached 480,500,a 14.3 per cent increase from last quarter,and a 29.3 increase from 2021.

On Wall Street overnight,the S&P 500 sunk by 4.3 per cent while the Dow Jones tumbled by 3.9 per cent and the Nasdaq plunged by 5.2 per cent. All three indexes notched their biggest one-day percentage drops since June 2020,according to Commsec analyst Steven Daghlian.

“Keep in mind that this follows a four-day,5-per-cent winning streak for the US markets,” he added.

Bond prices also fell sharply,sending their yields higher,after the government report showed inflation in the US decelerated only to 8.3 per cent in August after peaking in June at 9.1 per cent. Economists had expected it to slow down to 8.1 per cent. The US dollar soared,hammering other currencies. The Australian dollar was trading 2.3 per cent lower at 67.32 US cents this morning.

Seema Shah,chief global strategist at Principal Global Investors,said the Fed had left no ambiguity when it came to inflation.

“The Fed’s stance is quite clear. Due to the enormity of the inflation task ahead,a weakening economy cannot stand in the way of further monetary tightening,and rates will need to remain at a restrictive setting for a prolonged period,” she said. Investors thus had to “position[their] portfolios for a more sustained monetary tightening campaign.”

Tweet of the day:

Quote of the day:“Rio Tinto and Baowu continue to work together on low-carbon steelmaking research,exploring new methods to reduce carbon emissions and improve environmental performance across the steel value chain,” Rio’s iron ore chief executive Simon Trott said.

The quotes come as mining giant Rio Tinto announced $3 billion on the Western Range iron ore project in the Pilbara region.

You may have missed:Virgin Australia’s losses blew out almost $400 million in 2022,even though things improved at the end of the financial year as the aviation sector began to benefit from record demand for travel.

The carrier’s underlying loss increased more than fivefold to $386.7 million in the year to June 30,from $76.8 million in the previous year,financial results lodged with the Australian Securities and Investments Commission on Wednesday show.

US private equity giant Bain Capital plucked Virgin out of administration in November 2020. It’s expected the airline will land back on the ASX at some point in 2023.

with AP

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