Australia: Shares fall 2% as potential US banking crisis alarms traders
AUSTRALIAN shares slumped more than 2 per cent to their lowest level since early-January on Tuesday, led by mining and banking stocks , as traders fretted about a broader financial fallout from the collapse of US-based Silicon Valley Bank last week.
The S&P/ASX 200 index fell for a third straight session, declining 2.1 per cent to 6,960.40 by 0006 GMT. The benchmark fell 0.5 per cent on Monday.
Startup-focused lender Silicon Valley Bank collapsed on Friday, becoming the largest bank to fail since the 2008 financial crisis.
Battling a crisis of confidence, investors globally sold off bank shares despite US regulatory actions to rescue failed banks and guarantee deposits.
In Sydney, financial stocks slipped 2.8 per cent to hit a more five-month low, with the so-called ‘Big Four’ banks retreating between 1.7 per cent and 2.7 per cent. Heavyweight miners followed suit, shedding 1.4 per cent on news that Chinese regulators might take steps to curb inflated iron ore prices. Sector majors BHP Group and Rio Tinto retreated 1.3 per cent and 0.8 per cent, respectively.
Energy stocks dived over 3 per cent, hitting their lowest since October, as oil prices slid about 2 per cent overnight. Woodside Energy lost 3.2 per cent, while Santos fell 3 per cent.
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Technology stocks retreated 3.7 per cent and were the top percentage losers on the benchmark. Block Inc’s ASX-listed shares and Xero dropped 3.7 per cent and 2.5 per cent, respectively.
Gold stocks were a lone bright spot on the benchmark, up 2.6 per cent to hit a four-week high.
Bullion prices surged as their safe-haven appeal drew in investors spooked by the collapse of Silicon Valley Bank.
Newcrest Mining, Northern Star Resources and Ramelius Resources added between 3.3 per cent and 2.8 per cent.
New Zealand’s benchmark S&P/NZX 50 index fell 0.5 per cent to 11,629.92.
Shares of New Zealand’s Synlait Milk hit over 3-month low after it cut its base milk price forecast for the 2022/2023 season on weak global demand. REUTERS
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