Australia’s stock market suffered its biggest two-day drop in more than two years as investors feared the US economy was sliding into recession.
Japan’s first interest rate hike in 17 years also hit tech stocks as investors continued to borrow yen to buy U.S. stocks.
Jessica Amir, market strategist at Moomoo, said technology stocks were losing value as investors were also concerned about the United States, the world’s largest economy, sliding into a recession.
“The US market is likely to have a hectic Monday,” he told Daily Mail Australia.
In the first hour of trading on Monday, the benchmark S&P/ASX200 index fell 2.7 per cent to 7,729.2, while the broader All Ordinaries index fell 2.8 per cent to 7,946.9.
This followed the ASX closing down 2.11 per cent on Friday, meaning the stock is down 4.8 per cent over the past two trading days.
Technology stocks were the worst performers, with Block Inc, formerly known as Square, falling 9.6 percent to $90.50 in mid-afternoon trading, while buy-now-pay-later app Zip fell 7.2 percent to $1.75.
“I think we’re in quite a difficult situation,” AMP chief economist Shane Oliver told Sky News.
‘It seems to me that the inflation fear we saw earlier this year in the United States and more recently in Australia has unnecessarily delayed monetary easing.
“And now, of course, financial markets are starting to worry about that increased risk of recession.”
On Wall Street, the Dow Jones Industrial Average fell more than 1.5 percent on Friday, while the S&P 500 fell 1.84 percent, after U.S. unemployment jumped to a nearly three-year high of 4.3 percent.
All ASX sectors started the week trading in the red.
All ASX sectors were in the red in early trading, with IT stocks leading the decline with a 4.5 per cent drop.
BHP fell 2.2 percent, while the big four banks lost between 3.4 and 3.9 percent.
Monday’s setback marked the biggest two-day drop since the ASX plunged 4.28 per cent between June 14 and 15, 2022, amid anticipation of massive rate hikes by the US central bank.