Australia Market tumbles on global growth jitters

Australian stock market tumbled on Monday, 25 March 2019, as risk aversion selloff triggered across the board on taking clues from the sharp decline in US and European equities on Friday amid growing concerns of a slowdown in the global economy fuelled by downbeat economic data from the US and Europe, and a cautious tone from the Federal Reserve. All ASX subsectors were down, with shares in information technology, materials, energy, financials, and property trusts issues being notable losers. At closing bell, the benchmark S&P/ASX200 index tumbled 69.02 points, or 1.11%, at 6,126.21 points, while the broader All Ordinaries retreated 72.15 points, or 1.15%, at 6,208.72.

The rout in European and US stocks from Friday has continued in early Asian trade on Monday. The sharp falls reflect growing concern about the outlook for the global economy, sparked by soft PMI data from the Eurozone and United States in March that amplified concerns that the recent slowdown is becoming entrenched.

 

Stocks around the world were under pressure as investors fled to the safety of bonds after cautious remarks by the U.S. Federal Reserve last week on cooling economy sent the 10-year treasury yields below the three-month rate for the first time since 2007 embedding interest rate curve inversion. Traditionally, an inverted yield curve - where long-term rates fall below short-term - has signalled an impending recession. .

On US-China trade front, Negotiations between the two governments aimed at resolving the trade war will resume this week. Top US officials are due to hold talks with their Chinese counterparts in Beijing starting Thursday. A Chinese delegation is scheduled to go to Washington for further talks in early April. Negotiations had been on hold as the two sides tried to figure out how to overcome disagreements about how the United States would ensure China is abiding by any deal. US concerns about how China goes about getting hold of American technology and trade secrets have also been a sticking point.

Shares of information technology were the biggest loser, with Wisetech Global down 4.5% to A$22.28, Afterpay Touch down 5.3% to A$19.55 and Altium down 8.4% to A$32.07.

Energy and materials shares were also hard hit, with Oil Search down 3.8% to A$8, Woodside Petroleum down 2.8% to A$34.79 and Beach Energy down 5.6% to A$2.03. Global miner BHP dropped 1.3% to A$37.13, South32 was down 2.8% to A$3.76 and Rio Tinto dropped 1.1% to A$93.13.

Shares of banks and financials were in the red, with ANZ down 2.3% to A$25.92, CBA down 0.9% to A$70.78, Westpac down 1.5% to A$26.12 and NAB down 0.9% to A$24.87.

CURRENCY: The Australian dollar eased against the U.S. dollar. The Aussie dollar was quoted at 70.83 US cents, from 71.08 US cents on Friday.

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