ASX tumbles 3.6% to close at 16-month low

The Australian sharemarket has suffered its worst losses in over two years, obliterating $82bn of market capitalisation off the ASX 200.

At the closing bell, the S&P/ASX 200 plunged 3.6 per cent, or 246 points, to 6,686. All sectors closed in the red. The worst-performing sector was energy, down 4.9%. The sector with the fewest losses was communication services, down 1.7%.

The best-performing stock in the S&P/ASX 200 was PolyNovo (ASX:PNV), closing 7.8 per cent higher at $1.25. It was followed by shares in Domino Pizza Enterprises (ASX:DMP) and Computershare (ASX:CPU). The worst-performing stock in the S&P/ASX 200 was Zip Co (ASX:ZIP), closing 15.9 per cent lower at $0.53, followed by Block (ASX:SQ2) and Chalice Mining (ASX:CHN), down 15.07 per cent and 14.10 per cent respectively.

Major banks extended their fall. ANZ (ASX:ANZ) led the decline, falling by 4.6 per cent to $22, while the Commonwealth Bank of Australia (ASX:CBA), National Australia Bank (ASX:NAB) and Westpac (ASX:WBC) fell in the range between 2.8 per cent and 4.4 per cent.

Shares in Woodside Energy (ASX:WDS) closed 5.25 per cent lower at $32.99. Shares in Beach Energy (ASX:BPT) closed 5.63 per cent lower at $1.76. Shares in Santos (ASX:STO) closed 5.04 per cent lower at $8.10.

Shares in Fortescue Metals (ASX:FMG) closed 8.48 per cent lower at $19.63. Shares in Rio Tinto (ASX:RIO) closed 4.18 per cent lower at $111.05. Shares in BHP (ASX:BHP) closed 4.24 per cent lower at $44.26.

Shares in Flight Centre (ASX:FLT) closed 4.66 per cent lower $17.79.

Asian equities were also lower Tuesday but with many now off their lows. Japan lost more ground today, but has bounced a little approaching its close. Greater China markets were also down, but with the Hang Seng close to its flatline. Taiwan is lower. South Korea is down again as the truckers’ strike deepens. India is higher, and several Southeast Asia markets have modest gains.

US and European futures indicate a higher opening. The US dollar is flat after reaching fresh 20-year peak overnight.

Treasury yields are down at the long end, higher at the short.

Crude is a little higher, and precious metals lower again. Other commodities are flat, although Dalian iron ore is lower.

Cryptocurrencies are volatile, recovering from more steep losses this morning.

Ramp in Fed rate hike expectations are heightening doubts about the Fed being able to engineer a soft landing. Recession calls are getting louder amid concerns high inflation and acceleration in policy tightening will trigger a pullback in discretionary spending. This comes as more surveys show economists believe US will fall into recession next year. Global financial bodies are also lowering growth forecasts as stagflation.

Company news

Kazia Therapeutics (ASX:KZA) announced this morning the presentation of new data regarding the activity of paxalisib in two forms of childhood brain cancer with poor prognosis and limited treatment options. Shares in Kazia (ASX:KZA) closed unchanged at 0.78.

Westgold Resources (ASX:WGX) has reported record gold production from its Bryah and Murchison operations in May of 25,100 ounces, up from 23,969 ounces in April. The company said it remains on track to meet its full-year production and cost guidance of 270,000 ounces at an all-in sustaining cost of $1500 to $1700 an ounce. Shares in Westgold (ASX:WGX) closed at 3.86 per cent higher at $1.21.

Lake Resources’ (ASX:LKE) share price was the standout in the market today, closing up 13.57 per cent at $1.59. The company announced its inclusion in the ASX 200 last week, with the expectation of around 90 million to be bought by passive index funds ahead of this inclusion on June 20.

Futures

The Dow Jones futures are pointing to a rise of 316 points.
The S&P 500 futures are pointing to a rise of 48 points.
The Nasdaq futures are pointing to a rise of 187 points.
The SPI futures are pointing to a fall of 125 points when the market next opens.

Asian markets

Japan’s Nikkei has lost 1.3 per cent.
Hong Kong’s Hang Seng has gained 0.2 per cent.
China’s Shanghai Composite has lost 0.2 per cent.

Commodities and the dollar

Gold is trading at US$1827.84 an ounce.
Iron ore is 3.5 per cent lower at US$136.60 a ton.
Iron ore futures are pointing to a fall of 0.6 per cent.
Light crude is trading $0.80 higher at US$108.90 a barrel.
One Australian dollar is buying 69.62 US cents.