ASX opens higher despite Wall Street bloodbath

The Australian stock market has defied a brutal sell off on Wall Street overnight to rise in opening trade this morning.

The nation's key stock market index, the ASX 200, rose 1.8 per cent to 5093.4 points - staying above the 5000 point mark - in the opening minutes of trade this morning.

The rise came despite Wall Street being gripped by a fresh bout of panic selling overnight as the Dow Jones Industrial Average plunged 12.9 per cent.

The drop - the worst session in the US since the 1987 stock market crash - came after a second emergency rate cut and the relaunch of quantitative easing by the Federal Reserve failed to calm investors.

The positive open for local stocks this morning follows the ASX 200 plunging 9.7 per cent to 5002 points on Monday in its biggest single-day drop since the notorious 1987 stockmarket crash.


Digital market boards are seen at the Australian Stock Exchange (ASX) in Sydney.
Digital market boards are seen at the Australian Stock Exchange (ASX) in Sydney.


The ASX 200, which broadly tracks the value of the nation's 200 biggest companies, has lost about 30 per cent of its value in three-and-a-half weeks of tumultuous trading since February 20 as fear COVID-19 will tip the global economy into a recession has morphed into panic.

A poll of 15 experts covering economists, bankers and property representatives released this morning found 13 said they expect the nation to plunge into recession.

"Only a few days before the last RBA cut two weeks ago, 85 per cent of economists said they did not expect a cut and only half thought the ASX 200 would drop by 10 per cent in value," Finder insights manager Graham Cooke said.

"Within a week, we had a cut and a 20 per cent (ASX 200) drop. This signals the sheer severity and speed of the coronavirus impact."

NAB's morning call note says global markets were far from impressed with measures to counteract the economic impacts of the coronavirus on Monday - despite the Fed Reserve cutting interest rates by a full one per cent, and the return of quantitative easing.


Wall Street had its worst day since 1987. Picture: AP
Wall Street had its worst day since 1987. Picture: AP



The US stock market plunged to its worst day in more than three decades as voices from Wall Street to the White House said the coronavirus may be dragging the economy into a recession.

Monday's 12 per cent drop for the S&P 500 means it has plummeted nearly 30 per cent since setting a record less than a month ago, and it's at its lowest point since the end of 2018. Losses were steep on Monday (local time), accelerating in the last half hour of trading after President Donald Trump said the economy may be headed for a recession and asked Americans to avoid gatherings of more than 10 people.

The plunge came even though the Federal Reserve rushed to announce a new round of emergency actions before markets opened for trading on Monday. The moves are aimed at propping up the economy and getting financial markets running smoothly again, but they may have raised fears even further. Investors are also waiting for the White House and Congress to offer more aid to an economy that's increasingly shutting down by the hour.

The Dow Jones Industrial Average plunged 2997 points, or 12.9per cent, and, likewise, the S&P 500 had its worst loss since the Black Monday crash of 1987. It surpassed Thursday's loss of 10 per cent for the Dow.


he market's losses the last few weeks are the steepest since the 2008 financial crisis dragged the economy into the Great Recession. US President Donald Trump and professional investors say the stock market could bounce back strongly as soon as health experts get the virus under control.

The problem is that no one knows when that could be, and broad swaths of the economy are grinding closer to a standstill in the meanwhile, from parked airplanes to the nearly empty restaurant around the corner.

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