ASX extends 2016 losses to $100 billion

The selloff on the local sharemarket extended to a seventh day on Monday, as worries about China's economic health pulled the S&P/ASX 200 index to a two-and-a-half year low before it trimmed losses during the afternoon.

The benchmark index slid 1.2 per cent to 4932.2, taking its losses since the start of the close to 7 per cent, or around $100 billion in market capitalisation. During the session it fell to 4880.1, a level last seen in July 2013. The broader All Ords dropped 1.2 per cent to 4990.7.

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Tough day for Australian share market

There are fears of another full-blown currency crisis after the ASX fell to a two-and-a-half-year low and the Aussie dollar plunged further off the back of turmoil in Chinese markets. John McDuling reports.

Blue chip stocks were sold off viciously again, with two of the four big banks and Australia's biggest miners all touching multi-year lows. 

"This is the worst beginning to a year that we've ever had in history," said Damien Boey, equity strategist at Credit Suisse. "There is incredible macro risk that's driving people's thinking at the moment."

The ASX has 'arguably been in a bear market for the past nine months', Clime says.
The ASX has 'arguably been in a bear market for the past nine months', Clime says. Photo: AFR

Resources giant BHP Billiton fell to a 11-year low, down 4.8 per cent to $15.55. Main rival Rio Tinto fell to a 7-year low, down 3.3 per cent to $40.50.  Iron ore miner Fortescue Metals Group dipped 5 per cent to $1.64.

While most commodity stocks seem to be languishing, a jump in the spot price for gold through resistance at $US1100 pushed Newcrest Mining up 0.03 per cent to $13.42.


Atlantic Pacific Securities analyst Gary Huxtable expects Australian gold producers to outperform in the coming months.

"One aspect in their favour during the commodity bust is that there is now an oversupply in that section of the labour market which should equate to increased margins moving forward," he said.

Resources giant BHP Billiton fell to a 11-year low, down 4.8 per cent to $15.55.
Resources giant BHP Billiton fell to a 11-year low, down 4.8 per cent to $15.55.  Photo: Supplied

The big four banks were also weighing heavily on the market on Monday.

Commonwealth Bank of Australia fell 0.9 per cent to $78.64, while Westpac Banking Corporation was down 1.4 per cent to $30.56. ANZ Banking Group fell to a 3-year low during trade and closed down 1.6 per cent to $25.15 as did National Australia Bank, which closed down 0.9 per cent at $27.42.

The oil price continued its downward spiral, falling to its next 11-year low.

"Sentiment indicators are all to the extreme sell," said Michael McCarthy, chief strategist at CMC Markets. "Until we see a supply-side response, the potential for significantly higher prices is low."

Australia's biggest oil producer Woodside Petroleum dipped 0.56 per cent to $27.63. Despite oil's miserable performance, the energy sector is one of the best performing in the ASX this year as investors bet the oil price can't fall much further.

Shares in iSelect fell sharply, closing down almost 40 per cent on the news the insurance comparison website had cut its guidance for full year earnings by as much as 39 per cent. 

JB Hi-Fi is still trading up, on the back of Dick Smith electronic's collapse. The shares were up 0.3 per cent to $20.51 on Monday. 

Telstra Corporation closed up 0.4 per cent at $5.31.

The biggest food and liquor sellers were mixed. Woolworths fell 0.08 per cent to $22.87, while Wesfarmers, owner of rival coles was bumped up 0.3 per cent to $39.75.

AFR Graphic