The media are calling it Bloody Monday, others Black Monday, but no matter what you are calling it, yesterday remains the worst day of losses for the Australian sharemarket since the global financial crisis. The ASX 200 Index ended the day down 4.1 per cent to 5001.3 points wiping off more than $60 billion and ending the day at the lowest level in more than two years.
Global markets felt the full effect of the sell-off with London’s FTSE down more than 3 per cent. The Nasdaq fell more than eight per cent before rallying to close just 2.4 percent down and a similar trend was seen on the Standard & Poor’s 500 index, which was down five per cent on opening before rallying back up to two per cent an hour later. As a result of global market overnight trading, the Australian market is expected to be in for another bloodbath today.
“Markets will go up and down . . . the fundamentals are still good for the global economy and particularly for the United States economy, which is growing relatively strongly and now has full employment,” said Federal Treasurer Joe Hockey on ABC radio.
St George chief economist Hans Kunnen agrees with the Federal Treasurer.
“Nothing has fundamentally changed from a month ago,” he said. “Commodity prices were already weak; apart from oil, they’re not particularly weaker, iron ore has held its ground, and we’ve seen solid job growth over the past 12 months.”