Australia: Shares plunge over 5% on inflation, China Covid-19 worries
AUSTRALIAN shares fell more than 5 per cent on Tuesday and were headed for their worst session in over two years, as worries over rising inflation and fresh Covid-19 cases in China sparked a rout in global equities.
The S&P/ASX 200 index fell as much as 5.3 per cent, posting its biggest intraday percentage drop since March 2020 and extending losses to a third session.
Stocks and government bonds plunged across the globe as red-hot US inflation data fuelled worries about more aggressive policy tightening by the US Federal Reserve when it meets later this week.
Tech stocks led losses on the Australian benchmark index, shedding as much as 8.2 per cent to hit a more than two-year low after Wall Street’s weak finish overnight.
Australia-listed shares of Block Inc fell 18.2 per cent to lead losses on the tech index, followed by Appen and Novonix, which were down 11.6 per cent and 13.5 per cent respectively.
Miners plummeted 6.7 per cent in their worst intraday session in more than two years, after iron ore prices fell on Monday as fresh Covid-19 outbreaks in China revived fears of lockdowns dampening demand in the world’s top steel producer.
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Mining trio Rio Tinto, BHP Group and Fortescue Metals Group fell between 7.9 per cent and 6.2 per cent.
Financials retreated 5.4 per cent, with the big four banks losing between 6.5 per cent and 5.3 per cent.
Gold stocks dropped 5.2 per cent as the US dollar rallied on expectations of further Fed rate hikes.
New Zealand’s benchmark S&P/NZX 50 index extended losses to a fourth session, declining as much as 2.8 per cent to hit its lowest level since May 2020. REUTERS
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