ASX experiences heavy losses after second Wall St bloodbath

By AAP

Australian shares have again slid in early trade following a fresh plunge on Wall Street overnight, while the Aussie dollar has retreated below the 78 US cents level.

The benchmark S&P/ASX200 stock index was down 1.6 per cent after the first half-hour of trade, with every sector trading in the red and the market at its lowest level since October.

CommSec market analyst Steven Daghlian said the losses were not as bad as the futures had indicated but the situation remained uncertain.

"Fundamentally, the Australian market still remains strong, but the losses in the US have been too high for us not to be affected," he said.

"This has less to do with anything here, and more to do with the concerns on inflation and interest rates in the US."

James Carlisle, head of research at InvestSMART, said private investors should not be worried about dramatic headlines.

"Looking at the big picture, the Aussie market is down 5 percent over the week – which takes it back to mid-October. This may push you five percent closer to your buy price for certain stocks, but it'sa important to remember that market moves often don't tell you anything about the price of an individual stock," Carlisle told 9Finance.

"Think back to what you were doing in October and repeat that process now. Most private investors will be looking at their watchlist and seeing whether the recent market moves have provided an opportunity to buy."

Overnight, US stocks plunged in another dramatic trading session, confirming a correction for the market that has thrown its nearly nine-year bull run off course. 

The S&P 500 slumped 3.8 per cent on Thursday while the Dow dropped 4.2 per cent as losses accelerated late in the trading day, and both indices have now fallen more than 10 per cent from their January 26 record highs.

In the local market, energy and materials copped the worst of the impact as oil and metal prices slid to their lowest in several weeks.

Shares in Woodside, Santos and Oil Search were all trading more than two per cent lower, while big miners BHP Billiton and Rio Tinto were also each down about two per cent.

Gold miners such as Newcrest and Evolution were marginally in the green as investors moved to safe-haven assets, while each of the big four banks were trading between 0.5 to 1.0 per cent lower.

Consumer stocks were also heavily in the red, led by an 8,5 per cent slide in Myer after the department store giant flagged a significant deterioration in trading conditions in the December quarter.

Shares in digital real estate service REA Group were down 1.8 per cent after its half-year profit sank 55 per cent amid a slowing housing market, while parent Newscorp's shares were also down, by 1.3 per cent, after it announced a first-half loss of $US16 million ($A22 million) despite an earnings boost from REA.

Meanwhile, the Australian dollar has slipped as traders turned risk-averse.

The local currency was trading at 77.89 US cents at 1030 AEDT on Friday, from 78.25 on Thursday.

ON THE ASX:

* At 1030 AEDT, the benchmark S&P/ASX200 was down 93.9 points, or 1.59 per cent, at 5,796.8 points.

* The broader All Ordinaries index was down 97.7 points, or 1.63 per cent, at 5,897.5 points.

* The SPI200 futures contract was down 80 points or 1.38 per cent at 5,732 points.

* National turnover was 1.1 billion securities traded worth $1.6 billion.

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