The Australian share market is experiencing its most significant two-day sell-off in two years, influenced by growing worries about a potential U.S. recession. The S&P/ASX 200 Index (ASX: XJO) has decreased by 2.5%, or 200.2 points, to 7,743, adding to Friday’s 2.1% drop. This total decline of over 4% in just two trading sessions marks the index’s worst performance since June 2022, with tech stocks also seeing substantial losses.
The downturn in the Australian market follows a sharp decline in U.S. shares over the weekend. This drop was triggered by disappointing July non-farm payrolls data released on Friday, which showed fewer new jobs than anticipated and a faster-than-expected increase in the unemployment rate. These developments have heightened fears of a potential recession, with the recession probability indicator rising from 15% to 25%.
The banking sector in Australia has faced significant pressure, with Westpac (ASX: WBC) and ANZ (ASX: ANZ) experiencing an additional 3% drop in their share prices, following similar declines in the previous session. This is part of a broader global market sell-off that has been compounded by concerns that investments in major tech companies, particularly those heavily involved in artificial intelligence, may be overvalued. Further adding to the market’s woes, it was reported on Sunday that investor Warren Buffett had sold $116 billion worth of stocks in the second quarter.
On the ASX, the technology sector has been particularly hard-hit, with a decline exceeding 3%. Notably, Afterpay owner Block (ASX: SQ2) has seen its share price fall by 7.8% to $92.25.
Stocks in Focus Argo Investments (ASX: ARG): The company has reported a full-year profit of $253 million, a decrease from the previous year. Despite this decline, Argo Investments has maintained its dividend at 18 cents per share. The company’s shares have decreased by 0.8% to $8.90.
TPG Telecom (ASX: TPG): The company’s shares have remained relatively stable following confirmation of ongoing discussions with Vocus (ASX: VOC) regarding its fibre network. This update follows a report from The Australian Financial Review’s Street Talk column.
Ramsay Health Care (ASX: RHC): The company’s share price has dropped by 1.5% to $44.65. Ramsay Health Care has projected its financial year 2024 net profit to be between $265 million and $270 million, compared to $278.2 million in the previous year.
The Australian share market is grappling with significant declines driven by U.S. economic data and broader market concerns. The technology and banking sectors are particularly affected, while specific companies like Argo Investments (ASX: ARG), TPG Telecom (ASX: TPG), and Ramsay Health Care (ASX: RHC) are also experiencing notable movements in their stock prices.