Australian Market Plunges Amid Global Recession Fears
Australian shares have endured their worst week since June 2022, as the All Ordinaries lost $70 billion in value. The S&P/ASX 200 plunged 3.9% for the week, marking a brutal five-day losing streak.
Investors reacted to growing concerns of a US recession, as Wall Street recorded its largest one-day drop since the pandemic. The downturn hit nearly every sector on the ASX, with energy stocks leading the collapse.
Also Read: See Yesterday’s News: ASX Bloodbath Worsens: ASX 200 Plunge Deepens as Market Hits New Lows
The Australian dollar also fell, slipping to 62.4 US cents by Friday afternoon.
Stock Market Falls Sharply
The ASX 200 closed 2.4% lower on Friday, capping off a painful week for Australian investors. The market has now dropped 11% from its all-time high in mid-February, officially entering a technical correction.
Every sector except consumer staples saw losses. The biggest declines came from:
- Energy (-12.46%)
- Information Technology (-10.29%)
- Materials (-6.72%)
Consumer staples were the only sector in positive territory, rising 3.46%.
Weekly Sector’s performance on ASX
Wall Street’s Sell-Off Sparks Panic
Global markets took a hit as fears of a US recession sent shockwaves through stocks. Wall Street’s sharp decline triggered early losses on the ASX, with investor sentiment turning negative.
AMP’s chief economist Shane Oliver commented on the situation, saying, “The good news is that we may be getting close to the top on US tariffs, which may help settle markets down.”
However, he also warned, “Given the even bigger threat to global growth flowing from Trump’s latest round of tariffs, it looks like share markets will have a further leg down.”
Energy Sector Takes the Hardest Hit
Energy stocks saw the most significant drop, losing 12.46% in a single week. Investors worst dumped shares as oil prices tumbled on expectations of lower global demand.
Companies in the materials sector also struggled, falling 6.72%. Mining giants saw sharp losses as investors worried about reduced demand from China.
Tech and Financials Suffer Heavy Losses
Technology stocks continued their downward spiral, dropping 10.29% for the week. worst Rising interest rates and fears of an economic slowdown added pressure on the sector.
Financial stocks fell 2.34%, as concerns over weaker lending and declining consumer spending weighed on the big banks.
Super Funds Hit by Cyber Attacks
Insignia Financial saw its shares tumble 5.3% after revealing it had been affected by cyber attacks targeting Australia’s largest superannuation funds.
The company, which owns MLC, Expand, IOOF, and Plum, reported that worst hackers used a technique called credential stuffing to try and access customer accounts.
In a statement, Insignia confirmed 100 customer accounts showed suspicious activity. However, it assured investors there had been no financial losses for its customers.
Not all super fund members were so lucky. AustralianSuper confirmed that four of its members lost $500,000 combined due to cyber fraud.
ASX Loser of the Week: Amotiv
Vehicle parts company Amotiv suffered the worst percentage worst fall on the ASX. Despite downplaying the impact of Donald Trump’s new tariffs, investors sold off shares.
The company lowered its earnings outlook, citing weak Australian vehicle sales and muted demand. It is now exploring new suppliers and alternative manufacturing locations to navigate the changing market.
What’s Next for the Australian Market?
The ASX remains under pressure as global worst recession fears grow. Analysts warn that further declines are possible if economic data from the US and China continues to disappoint.
With interest rates still high and consumer confidence shaky, the Australian market faces an uncertain road ahead. Investors will be closely watching corporate earnings and economic signals in the coming weeks.
