The ASX finished trade down 3.6 per cent and losing tens of billions in the process, with Sky News Business editor Ticky Fullerton saying the result “is the fastest fall to create a bear market in Australia’s history”.
The benchmark S & P/ASX 200 closed down 213.7 points to 5,725.9 points, marking the lowest point the market has hit in 14 months.
The Aussie dollar, which was buying 65.06 US cents, was down from 65.62 US cents at the market close on Tuesday.
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The nation’s big banks also suffered heavy losses. Commonwealth Bank dropped 6.6 per cent, NAB 6.3 per cent, Westpac down 5.3 per cent and ANZ dropped 5.5 per cent.
The ASX 200 has now been labelled a “Bear market”, meaning the prices of securities have fallen 20 per cent or more from recent highs.
Earlier today the Reserve Bank was hesitant to speculate how deeply the deadly coronavirus outbreak will hurt Australia’s growth beyond the March quarter, but suggested interest rate cuts and mining investment will at least help soften the blow.
Deputy Governor Guy Debelle told the Australian Financial Review Business Summit in Sydney on Wednesday that a record low interest rate would support a post-virus recovery in spending, even if Australian households were reluctant to part with their cash as the virus spreads.
“They may not spend it straight away, but it brings forward the day when they will be comfortable with their balance sheets and resume a normal pattern of spending,” Mr Debelle said.
The bank cut the cash rate to a record low 0.5 per cent on March 3 to help strengthen the economy against the impact of the virus outbreak, and is widely expected to make back-to-back cuts next month, taking the interest rate to a new record low of 0.25 per cent.
– With AAP