Australian share market at the lowest level in two-and-a-half years

Monday, Jan 11 2016

The Australian share market has dropped to its lowest level in two-and-a-half years, with a frenzied sell-off in its seventh day. The market has fallen below the 4900 mark, dropping more than two per cent in a morning bloothbath as fears mount over the Chinese economy. The benchmark S&P/ASX200 index skidded to 4,880.1 at 11.20am, its lowest point since July 2013, before rallying back above 4,900 soon after.

At noon, the S&P/ASX200 index was at 4,907.8 points and the broader All Ordinaries index at 4,967.4 points. The falls have stripped more than seven per cent from the ASX200 since the beginning of the year, meaning a loss of about $103 billion in market capitalisation. Today’s rout comes as investors prepare for another week of uncertainty, amid concerns about China’s growth, markets and currency. USD/CNY mid-point for today was set at 6.5626. Friday's close was 6.5938 and Friday's mid point was set at 6.5636.

A rare bright spot is JB Hi-Fi, with rival Dick Smith’s collapse pushing its share price up two per cent since the year’s trading began. The banking, resource and energy sectors were the hardest hit after another tumble in commodity prices, while gold producers were among the only strong performers — with investors piling into this safe haven asset class. Oil players Santos and Origin were down more than four per cent, while mining giants BHP Billiton and Rio Tinto also lost more than four per cent. The banks were also well down, with best performer ANZ down 1.33 per cent.

Aussie is currently being traded around 0.70 area. Pair is likely to find support around 0.6930 handle and resistance above 0.7030 level. There will be no major data releases in the rest of the session.

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