ASX charts worst day in four years; tech stocks crumble

The worst sell-off in more than four years flooded every corner of the market in red on Monday.

The S&P/ASX 200 closed 3.7 per cent, or 293.6 points, lower at 7649.6, extending Friday’s 2.1 per cent loss. That places the bourse more than 5.5 per cent down over the past two sessions, and marks the worst one-day sell-down since May 2020, during the height of the COVID-19 pandemic.

The sell-down was sparked after July non-farm payrolls data released in the US on Friday undershot estimates and the jobless rate rose faster than expected. That has fuelled fears of a potential recession in the world’s largest economy. Goldman Sachs’ recession probability indicator was revised higher over the weekend from 15 per cent to 25 per cent.

UBS strategist Richard Schellbach said the magnitude of the moves in markets was a product of just how strong they have been until this point, with the ASX touching a record above 8100 points just three sessions earlier.

“Given the ascent of the market and the valuation that the sharemarket was sitting on, it was always likely to be challenged once we started to see softer data as we have seen over the last week,” Mr Schellbach said.

“And when you look at the moves on the Australian sharemarket today, it’s very much in sync with the defensive rotation that we saw in the US market.”

All 11 ASX sectors ended the day more than 1 per cent lower. Only two stocks managed to avoid the sell-off: those two stocks were sleep apnoea treatment provider ResMed which finished 2.9 per cent higher at $32.73. It was upgraded by brokers on better than expected results reported late last week. Domino’s Pizza was the other winner, which ended 0.8 per cent higher at $29.79. The fast food chain rebounded from a strong sell-off in the previous session.

Tech tumble

Tech stocks sank 6.6 per cent in their worst session since May 2022. The US tech-heavy Nasdaq slipped into a technical correction in Friday’s session, having fallen more than 10 per cent from its high.

Legendary investor Warren Buffett dumped $116 billion worth of stocks, including a large stake in iPhone maker Apple, in the second quarter, it emerged on Saturday. WiseTech Global fell 8.8 per cent to $84.26.

Fintech Zip Co was the worst performing, down 10.9 per cent to $1.68. Afterpay-owner Block declined 10.6 per cent to $89.53.

Energy stocks also took a beating, as consumption concerns hit the oil price. Brent crude fell 0.7 per cent $US76.25 a barrel, adding to a 3.4 per cent decline in the final session of last week. Santos dropped 5 per cent to $7.47 and Woodside declined 3.6 per cent to $26.48.

A fall in uranium prices continued to hurt ASX-listed uranium stocks. Boss Energy dropped 7.6 per cent to $2.94 and Deep Yellow dropped 10 per cent to 94.5¢.