Australia markets closed

ASX has a shocking Thursday, as recession recovery fears bite

Australian stocks are sinking on Thursday morning. (Image: Getty)

The Australian stock market abruptly ended its seven-day winning streak with a shocker of a trading day on Thursday.

The bloodbath finally ended with the ASX200 index trading 3.05 per cent lower at market close, sinking to 5,960.60 points.

The All Ordinaries didn’t fare much better, plummeting 3.03 per cent for the day, ending up at 6,079.50 points.

Thursday’s negativity came immediately after the ASX reaped gains in seven consecutive trading days, heading closer to its former highs before the coronavirus shut down the economy.

What happened at lunchtime?

Australian shares had been pummelled by Thursday lunchtime, as fear took hold that the recovery out of the coronavirus recession might be long and painful.

The benchmark ASX200 index had lost 1.96 per cent by 12:14pm AEST to sink to 6,027.80 points.

The broader All Ordinaries had headed 1.87 per cent lower to sit at 6,152.10 by 12:14pm AEST.

What happened this morning?

The Australian share market has slipped down Thursday morning, following indications overnight that the economic recovery in the US would not be swift.

The ASX200 index sunk 1.28 per cent in the first 17 minutes of trade to hit 6,069.40 points, while the All Ordinaries lost 1.23 per cent in the same period to sit at 6,192.50.

Local shares had gained value for seven consecutive days prior to Thursday, but it seems likely that streak will be broken.

What happened overnight?

The Dow Jones Industrial and S&P500 had a rollercoaster ride overnight before ending lower after statements from the US Federal Reserve.

The NASDAQ once again was an exception, as it closed trading at an all-time high for the third straight day.

The Federal Reserve forecast a 6.5 per cent fall in gross domestic product for the world's largest economy, while expecting to keep the cash rate near zero until at least 2022.

"The projections for GDP and for unemployment are that it's going to improve slowly from here, but it still takes a while to get back," Globalt senior portfolio manager Tom Martin told AAP.

The Dow Jones Industrial ended Wednesday down 1.04 per cent, the S&P500 dropped 0.53 per cent, and the NASDAQ gained 0.67 per cent.

SPI200 futures had sunk 1.08 per cent at 8am AEST, tipping that Australian shares would start Thursday lower.

with AAP

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