The Australian share market has tumbled to its lowest point in almost four months, experiencing its most severe single-day decline in 10 weeks as a global retreat from risk assets gathered pace.
Market Numbers Tell Stark Story
At midday on Friday, the benchmark S&P/ASX200 index had plummeted 125.1 points, or 1.43 per cent, to 8,628.3, while the broader All Ordinaries dropped 132.4 points, or 1.47 per cent, to 8,902.1. This dramatic sell-off erased an estimated $37 billion from local markets, mirroring similar heavy losses on Wall Street where both the S&P500 and Dow Jones Industrial Average fell by 1.7 per cent.
Chris Weston, head of research at Pepperstone, observed that no single catalyst triggered the broad reduction in risk positioning, yet the market drawdown proved particularly severe. "Looking across the suite of investible markets there were few places to hide, with volatility the obvious winner on the day," he remarked.
Sector Performance and Key Losers
Every one of the ASX's 11 sectors traded in negative territory by midday, with technology stocks suffering the most substantial blows, collapsing by 4.1 per cent. Among the notable casualties were Life360, which plunged 6.3 per cent, bringing its weekly losses beyond 20 per cent. Other technology firms followed suit, with Xero dropping 2.9 per cent, Wisetech Global falling 3.6 per cent, and Megaport retreating 8.4 per cent.
The banking sector showed no resilience either, with all four major banks recording significant declines. Commonwealth Bank dropped 1.7 per cent to reach a seven-month low of $157.54, while ANZ fell 1.8 per cent, Westpac declined 1.5 per cent, and NAB also dropped 1.7 per cent.
Even the heavyweight mining sector couldn't escape the downturn, with BHP falling 1.9 per cent, Fortescue dropping 1.8 per cent, and Rio Tinto subtracting 1.7 per cent. Gold miners similarly struggled despite the precious metal trading around $US4,184 per ounce, with Northern Star down 3.8 per cent, Evolution retreating 3.7 per cent, and Westgold falling 4.6 per cent.
Analysts Point to Interest Rates and AI Concerns
Kyle Rodda, analyst at Capital.com, identified shifting interest rate expectations as a central theme driving market movements. He noted that critical upcoming data could either support or undermine current market pricing of these expectations. Additionally, Rodda highlighted an "unwinding of the AI trade" as markets reacted to concerns that technology valuations had become excessively rich, causing the sector to lose momentum.
The ASX200 has now declined more than five per cent since reaching its all-time high of 9,094 on October 21, though it maintains a 5.8 per cent gain since the beginning of the year. The current quarter, however, shows a 2.4 per cent decrease.
Amid the equity market turmoil, the Australian dollar softened to 65.37 US cents from 65.57 US cents on Thursday evening. Cryptocurrencies also faced pressure, with Bitcoin falling below $US99,000 for the first time since April before recovering slightly to $US99,460, representing a 2.7 per cent decline over 24 hours.
Despite the widespread selling pressure, a handful of companies managed gains, including lithium miners Pilbara and Liontown, which climbed 0.9 and 0.7 per cent respectively, and Santos, which rose 1.0 per cent.
