Australian share market plunges with $54billion wiped out in just half an hour as investors react to Apple and Facebook plunges in US
- Australia's share market has lost $54billion in the opening half an hour of trade
- The benchmark S&P/ASX200 index dived by 2.48 per cent during early trade
- The local market reacted to Wall Street's worst one-day fall in three months
- American investors dumped stocks of tech giants Apple, Facebook, Amazon
Australia's share market lost $54billion in the opening half hour of trade as local investors followed the U.S. lead by dumping tech stocks.
The Australian Security Exchange's benchmark S&P/ASX200 dived by 2.48 per cent, or 151.3 points, to 5,961.3 points by 10.24am AEST on Friday.
This was the worst fall since mid-June, with Australian investors reacting to American investors offloading Apple, Facebook, Microsoft, Amazon and Tesla stocks.
CommSec market analyst Steven Daghlian said virtually all sectors were in the red after the local market reacted to Wall Street's biggest one day decline in three months.
'It's pretty much the worst day we've had since the middle of June and it's really because the US market had its worst day in three months,' he told Daily Mail Australia.
'It comes down to partly questions being asked about the extent of the rally in those tech stocks in particular recently.'
Australia's share market has lost $54billion in the opening half hour of trade as local investors copied their American counterparts by dumping tech stocks. The Australian Security Exchange's benchmark S&P/ASX200 dived by 2.48 per cent, or 151.3 points, to 5,961.3 points by 10.24am AEST. The market had barely reacted on Wednesday (pictured) when official data confirmed Australia's first recession since 1991
Australian investors reacted by selling technology stocks, with the previously soaring Afterpay falling by 4.24 per cent within the first half-hour of trade.
This fall mirrored what happened on Wall Street overnight, with Amazon shares diving by 4.63 per cent.
Apple shares plunged by an even more dramatic 8.01 per cent, as Microsoft plummeted by 6.19 per cent while Facebook fell 3.76 per cent.
Google's parent company Alphabet dropped 5.12 per cent as Tesla plunged 9.02 per cent.
Harvest Volatility Management's New York-based head of trading Mike Zigmont said the dumping of tech giant stocks was a reaction to some recent strong gains.
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'The prevalent attitude in the market now is that this is a healthy correction,' he told Reuters.
The three main indexes all slumped, with the Nasdaq Composite technology index diving by 4.7 per cent, or 567.14 points, to hit 11,489.30 by mid-afternoon trade.
Despite that fall, the US stock market has only fallen back to a one-and-a-half week low, with Wall Street rallying during 11 of the past 13 sessions.
Mr Daghlian said strong gains for American tech stocks in 2020 had simply made investors question the wisdom of such strong rallies.
'Amazon's up 80 per cent, Apple's up 65, Microsoft and Facebook up about 40 - these are not small companies, newcomers that aren't profitable yet, these are giants,' he said.
This was the worst fall since mid-June, with Australian investors reacting to American investors offloading Apple, Facebook, Microsoft, Amazon and Tesla stocks. CommSec market analyst Steven Daghlian said investors were questioning the strong, recent gains for tech giants
'Combined, those stocks are about four times, five times the size of the whole Aussie market.'
Australian share market investors have this week been more concerned about the unsustainable rise in American tech stocks than official data on Wednesday confirming Australia's first recession since 1991.
Australia's gross domestic product plunged by a record seven per cent during the June quarter, as a result of coronavirus shutdowns.
While the downturn rivals the 1930s Great Depression, Mr Daghlian said financial markets had already factored in the bad result.
'It had no negative impact on Aussie shares, it was well telegraphed, we all knew that was going to happen even though the figures were a bit worse than we were expecting,' he said.
Australian investors reacted by selling technology stocks, with Afterpay falling by 4.24 per cent within the first half-hour of trade. This fall mirrored what happened on Wall Street overnight, with Amazon shares diving by 4.63 per cent
