The Australian stock market has suffered its biggest two-day sell-off in more than two years as investors fear the US economy is slipping into a recession.
Japan’s first interest rate hike in 17 years also hit technology stocks, as investors had to continue borrowing yen to buy U.S. stocks.
According to Jessica Amir, market strategist at Moomoo, shares of technology companies fell as investors also worried about the recession in the United States, the world’s largest economy.
“The US market is likely to have a hectic Monday,” she told Daily Mail Australia.
In the first hour of trading on Monday, the main S&P/ASX200 index fell 2.7 percent to 7,729.2, while the broader All Ordinaries index fell 2.8 percent to 7,946.9.
This followed the ASX closing down 2.11 percent on Friday, representing a 4.8 percent decline for the stock market over the past two trading days.
Technology stocks were the worst performers, with Block Inc, formerly known as Square, falling 9.6 percent to $90.50 around lunchtime, while buy-now, pay-later app Zip fell 7.2 percent to $1.75.
Investors were concerned the US Federal Reserve would cut rates too late to avert a recession, according to Shane Oliver, chief economist at AMP.
The Australian stock market has seen its biggest two-day sell-off in more than two years as investors feared the US economy could slip into recession
“I think we’re in quite a difficult position here,” he told Sky News.
‘It appears that the inflation fears we saw earlier this year in the US and more recently in Australia have unnecessarily delayed monetary easing.
‘And now, of course, the financial markets are starting to worry about that increased risk of a recession.’
On Wall Street, the Dow Jones Industrial Average fell more than 1.5 percent on Friday, while the S&P500 lost 1.84 percent, after US unemployment rose to its highest level in nearly three years at 4.3 percent.
Jessica Amir, a market strategist at Moomoo, said technology stocks were bleeding as investors also worried about the United States, the world’s largest economy, slipping into recession
All sectors on the ASX were down in early trading, with IT stocks leading the way, down 4.5 percent.
BHP fell 2.2 percent, while the big four banks were down 3.4 to 3.9 percent.
Monday’s setback was the biggest two-day fall since the ASX fell 4.28 percent between June 14 and 15, 2022, amid expectations of huge interest rate hikes from the US central bank.
