ASX 200 Index Posts Record-Breaking Single Day Crash in Decades

ASX 200 Index Posts Record-Breaking Single Day Crash in Decades

The ASX 200 Index continues to move south as the benchmark closed 9.7 per cent or 537.3 points lower yesterday – the lowest in four years.

Major Australian financial institutions such as NAB and ANZ dropped by 12.5 per cent with stocks currently at $16.12 and $16.45 respectively. Westpac, likewise, dropped $2.14 or 12 per cent to its present $15.98. The Commonwealth Bank of Australia, on the other hand, fell $6.64 or 7.85 per cent to $59.72.

This market plunge marks a new record in the ASX200’s 20-year history as the biggest drop in a single day, wiping out $162 billion from the share market and closing at 5002 points.

All Ordinaries (XAO) index, the oldest market indicator in Australia, saw a record-breaking drop as the benchmark finishes 9.52 per cent lower, making it the second-largest fall in its entire history. Only the 1987 Black Monday market crash surpasses the Monday’s slump. The major setback happened after global financial sectors prepare for the worst during the ongoing COVID-19 Pandemic.

Major casinos such as Crown Resorts and Star Entertainment plunged by 11.2 per cent and 23.6 per cent respectively. It followed after both implemented the social distancing rule in their facilities by closing every subsequent poker machine. Aristocrat, a poker machine manufacturer, also experienced a 20 per cent drop in shares according to the ASX 200 Index.

Collins Food, the Australia-based KFC operator, slumped by over 20 per cent in stocks after the fast-food chain closed outlets in the Netherlands following the coronavirus outbreak.

Air travel portal Webjet and education company G8 suffered similar fates, closing with losses over 20 per cent. Outdoor marketing specialist and Junkee web publisher, Ooh Media collapsed by 20 per cent following its withdrawal of profit forecasts due to the virulent plague.

Virgin Australia fell 12.7 per cent resulting from a rumour that the company needed to amass extra funding from its stockholders or redistribute its liabilities. The junior airline denied the allegations.

This statement, however, did not stop index rating agency S&P from downgrading the credit rating of Virgin Australia from a positive B to a negative B rating. The deterioration of its operating environment and the slow implementation of initiatives to safeguard “balance sheet health” and “cash generation” are reasons for the rating downgrade.

ASX-listed Air New Zealand stopped trading after it announced an 85 per cent cut on its international flight routes and layoffs. Qantas dipped 5 per cent on Monday, but it means that its share price has declined 50 per cent since 20th February.

Only Telstra, Domino’s Pizza, and Fisher & Paykel Healthcare, from the ASX Top 200, were spared in this Monday’s market crash.

The US stocks, however, soared after US President Donald Trump announced his governmental response plan on tackling the coronavirus outbreak, calling the crisis a national emergency. It was then followed by a massive Wall Street rally last Friday which saw its largest upsurge in 11 years. Dow Jones saw gains of about 9.3 per cent or 1,981 points, while the S&P 500 jumped by 9.2 per cent and NASDAQ by 9.3 per cent.

Contrariwise, the ASX 200 Index still plunged 7.39 per cent on Monday morning at precisely 10:12 AEDT, dashing all hopes of a similar rally at the Australian bourse. Local markets also soared 13.7 per cent after Friday’s lunchtime trade dip, finishing with 4.42 per cent gains.

Nevertheless, central banks across the world are now taking emergency measures by cutting interest rates to almost zero in countries like the United States, Canada, and New Zealand. This move will create enough funds to help sectors affected by the economic shutdowns related to the COVID-19 Pandemic.

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