The Australian stock exchange has suffered its worst losses in over two years, tumbling along with markets around the world as fears deepen over the state of the global economy and rising interest rates.
The benchmark S&P/ASX200 index recovered somewhat in afternoon trading but still closed Tuesday down 246 points, or 3.55 per cent, to 6,686, its lowest level since February 2021. The broader All Ordinaries finished down 264 points, or 3.69 per cent, to 6,881.2.
The ASX200 is now down 7.3 per cent this month, 10.5 per cent this year and 12.7 per cent from its August 2021 peak. It has dropped in five of the past six sessions, with last week its worst performance since October 2020.
The rout resumed on Tuesday with every sector dropping by at least 1.7 per cent, with energy, materials and technology down by over four per cent.
"The sharpness of the fall suggests that we've entered a new and uglier phase of the market," Tiger Brokers Australia chief market strategist Michael McCarthy told AAP.
"None of us know the future with certainty, but that sort of sharp drop suggests that things are not going to settle down immediately, and we could be looking at further significant changes in prices."
But once the sell-off is complete it should present "terrific opportunities across the board" for Australians who have been careful and have something left to invest, Mr McCarthy added.
Markets around the globe have been reeling since the release of Friday night of US data showing inflation is still raging in the world's largest economy, meaning the US Federal Reserve will likely have to hike interest rates and withdraw monetary stimulus more quickly than the markets would have liked.
On Wall Street, the S&P500 has dropped 6.7 per cent in the past two days and is now in what's considered bear market territory with a drop of more than 20 per cent from its recent highs.
With the ASX closed on Monday for the Queen's Birthday holiday, the market was playing catch-up and plunged by 365.8 points, or 5.3 per cent, in the first 20 minutes of trading before recovering somewhat.
In the heavyweight mining sector, BHP was down 4.2 per cent to $44.26, Fortescue Metals dropped 8.5 per cent to $19.63 and Rio Tinto retreated 4.2 per cent to $111.05.
The financial sector was down 3.7 per cent with all of the big banks sharply lower.
ANZ was down 4.6 per cent to $22, Westpac had fallen 3.7 per cent to $20.07, NAB was down 4.4 per cent to $26.84 and Commonwealth was down 2.8 per cent to $91.20.
The energy sector was the worst performer, dropping 4.9 per cent, as Woodside Energy dropped 5.3 per cent to $32.99 and Santos dropped 5.0 per cent to $8.10.
In tech, Afterpay owner Block plunged 15.1 per cent to $93.14 as the price of Bitcoin dropped to US$22,300, its lowest level since December 2020.
A few companies managed to gain ground, including lithium producer Lake Resources. The soon-to-be-ASX200 component defied the rout with a 13.6 per cent gain to a one-month high of $1.59.
Meanwhile the Aussie dollar had hit a one-month low against the greenback. It was buying 69.54 US cents, from 71.25 US cents from Friday's close.
ON THE ASX:
The benchmark S&P/ASX200 index finished Tuesday down 246 points, or 3.55 per cent, to 6,686.
The All Ordinaries index closed down 264 points, or 3.69 per cent, to 6,881.2.
One Australian dollar buys:
69.54 US cents, from 71.25 US cents when the ASX closed on Friday
93.48 Japanese yen, from 95.23 yen
66.47 Euro cents, from 67.00 cents
57.07 British pence, from 57.06 pence
110.70 NZ cents, from 110.80 cents