Aust share market plunges again, closing at 10-week low

Derek Rose |

The Australian share market has fallen sharply again, hitting a 10-week low after the banking crisis spread to Europe amid fears about the solvency of Swiss banking giant Credit Suisse.  

The S&P/ASX200 on Thursday finished down 103.4 points, or 1.46 per cent, to 6,965.5, the benchmark index’s lowest level since January 3. The broader All Ordinaries index closed down 110.4 points, or 1.52 per cent, to 7,152.7.

The ASX200 was down up to 2.2 per cent in the first hour of trading but managed to claw back some losses on word that Credit Suisse would shore up its liquidity with a loan of 50 billion francs ($A82 billion) from the Swiss central bank.

“The risk of doing too little, too late may be one of the lessons left from the GFC,” State Street Global Advisors SPDR ETF equity strategist Julia Lee told AAP.

“The banking crisis that started last week is behind the recent bout of risk aversion. It’s seen interest rate expectations in developed markets plummeting.”

Whether the US Federal Reserve will hike interest rates next week is an open question, and its also unclear what the Reserve Bank of Australia might do at its next meeting. 

Ms Lee said that given the uncertainty around interest rates, all eyes would be on the European Central Bank’s decision, which will be announced early on Friday AEDT.

The Australian Bureau of Statistics released a strong domestic jobs report on Thursday, with the unemployment rate dropping to 3.5 per cent in February after rising to 3.7 per cent in January, possibly giving the Reserve Bank more leeway to deliver another rate hike on April 4.

CommSec chief economist Craig James said the “slighter stronger result than expected … keeps the April meeting in play by the RBA”. 

Retail trade figures and monthly inflation data released on March 28 and 29 will likely be key to the RBA’s decision.

Nine out of the ASX’s 11 sectors were lower on Thursday, with energy the worst-performing, dropping 4.8 per cent as Brent crude prices fell under $US75 a barrel for the first time since December 2021 amid fears of a global recession.

Woodside dropped 5.4 per cent to a six-month low of $31.09, Santos retreated 4.9 per cent to $6.82 and Whitehaven Coal fell five per cent to $6.65.

Ms Lee noted that with interest rate expectations falling rapidly, interest rate-sensitive areas such as real estate and communications held up. Telecommunications were up 0.4 per cent and property was down just 0.3 per cent.

The heavyweight mining sector dropped 3.2 per cent, with BHP falling 4.8 per cent to $43.39 as more claimants were added to a class action lawsuit in the United Kingdom related to the 2015 Samarco dam disaster in Brazil.

Fortescue Metals fell 3.2 per cent to $21.04, Rio Tinto subtracted 4.0 per cent to $114.73, and South32 retreated 4.8 per cent to $4.

Goldminers Newcrest and Northern Star were up about 0.5 per cent as the price of the safe-haven metal hit a six-week high of $US1,918 an ounce.

Investors also sought safety in defensive areas such as supermarkets and health care, with Coles up 1.3 per cent and Cochlear rising 1.5 per cent. 

All the big banks were down sharply again. ANZ dropped 2.5 per cent to $22.72, Westpac retreated 2.1 per cent to $21.19, NAB fell 1.7 per cent to $27.82 and CBA edged 0.1 per cent lower at $95.30.

Insurance companies, whose bond portfolios would be less profitable if central banks pause rate hikes, had another tough day, with QBE falling 2.2 per cent and IAG down 1.9 per cent.

Law firm holding company IPH plunged 10.6 per cent to $7.50 after disclosing it had been hit by a cyberattack.

Latitude Group was also hit by a hack involving the theft of customer data. Its shares were in a trading halt.

The Australian dollar was buying 66.38 US cents, from 66.82 US cents at Wednesday’s ASX close.


* The benchmark S&P/ASX200 index finished Thursday down 103.4 points, or 1.46 per cent, at 6,965.5.

* The broader All Ordinaries dropped 110.4 points, or 1.52 per cent, to 7,152.7.


One Australian dollar buys:

* 66.39 US cents, from 66.82 US cents at Wednesday’s ASX close

* 88.20 Japanese yen, from 90.02 Japanese yen

* 62.60 Euro cents, from 62.25 Euro cents

* 54.99 British pence, from 54.98 pence

* 107.69 NZ cents, from 107.54 NZ cents