The horror session wiped off all the gains made since January 2019 and brings the ASX to the edge of a bear market,having fallen 19.5 per cent since the high of 7162.4 points reached a few weeks ago. The decline topped only by an 8.3 per cent fall during the depths of the global financial crisis in October 2008.
“There was some real fear in the markets this morning,” said Con Michalakis,chief investment officer at Statewide Super.
“There was a sense of panic given movements in the Aussie dollar,US stock futures and bond markets."
An aggressive oil pricing move from Saudi Arabia and a failed OPEC meeting sent oil prices down by more than 20 per cent. Saudi Arabia shocked oil markets when it started unilaterally selling oil about 7 per cent below benchmark levels on the weekend,while OPEC negotiations failed to reach output agreements.
Mr Michalakis cautioned that while it’s difficult to predict whether there’ll be a specific catalyst to help stabilise markets,he predicts a big fiscal stimulus will be announced to help support economic conditions.
Fidelity International called the overnight developments a''worst case scenario''for oil markets.