Nearly $60 billion AUD in value were lost on the ASX 200 on Tuesday with a resources-led sell-off causing a 3.8 per cent drop.
The session closed at the lowest level since July 10, 2013 and suffered the 18th biggest one-day percentage fall in its 15-year history. Australian mining stocks were squashed, but all ten sectors on the ASX were in the red. According to Ben Le Brun, market analyst at OptionsXpress, the local bourse was a bloodbath on Tuesday, with selling across all sectors, Australian Associated Press reported.
On the local bourse, BHP Billiton shrank by 6.65 per cent, Fortescue Metals descended 6.44 per cent and Rio Tinto sagged 4.57 per cent.
According to Debbie Alliston, AMP Capital’s head of portfolio management, China represents the key factor in falling share prices. However, she made clear that members of superannuation funds with investments in a collection of assets should not panic about the market’s downturn. Ms Alliston also added that uncertainty about the exact timing of a U.S. Federal Reserve interest rate increase contributes to negative sentiment.
The market could deteriorate if company earnings in the U.S. fall and signs of deflation materialize around the world.