Some favourite stocks of `mum and dad' investors took a beating while the ASX closed lower ahead of a key meeting of US Federal Reserve officials.
Artificial intelligence vendor Appen fell heavily as did A2 Milk after issuing earnings reports, while investors preferred the outlook for Qantas and Woolworths.
Appen shares lost more than 21 per cent after first-half earnings and profit fell. The company also lowered its full-year earnings forecast.
A2 Milk was lower by more than 11 per cent after revealing full-year sales were down. Shareholders will not receive a final dividend.
ThinkMarkets analyst Carl Capolingua feared amateur investors may have been caught in the carnage.
"Appen and A2 are big favourites with our clients because they're well known," he said.
"These stocks were huge performers before COVID."
However both stocks have performed poorly since the pandemic.
Mr Capolingua suspected some amateur investors bought the stocks at these reduced prices, thinking they had a bargain.
"The warning for investors is not to rush and buy a stock simply because it's fallen in price," he said.
"There is good reason for the price being what it is. The value of a stock is based on its future earnings."
Mr Capolingua's comments were particularly relevant to Qantas.
The airline posted a full-year net loss of $1.73 billion due to the virus.
Yet a better balance sheet and boss Alan Joyce's claim that international travel could be possible by Christmas helped shares climb 3.49 per cent.
The ASX losses ended three consecutive days of gains. Materials, utilities and technology shares had the biggest drops.
Most Asian markets were lower too, a day before US Federal Reserve officials discuss policy in the Jackson Hole Symposium.
Fed Chairman Jerome Powell is expected to discuss whether the central bank will ease bond buying as the US economy recovers from the pandemic.
The benchmark S&P/ASX200 index closed lower by 40.7 points, or 0.54 per cent, to 7491.2.
The All Ordinaries closed down 39.2 points, or 0.5 per cent, to 7770.4.
On Friday, investors will gain more idea of the effect coronavirus lockdowns in NSW and Victoria have had on retail spending.
The Australian Bureau of Statistics will release retail trade figures for July. Economists forecast a two per cent decline.
Woolworths has experienced the impact at Big W stores. The retail giant revealed Big W sales have dropped more than 15 per cent in FY22 due to virus restrictions.
The news came as Woolworths delivered a $2 billion off-market share buy-back from full-year profit.
Profit rose from panic buying and investors will receive an improved final dividend of 55 cents per share.
Shares were up 0.42 per cent to $40.99.
Travel group Flight Centre slumped to a loss due to the impact of the coronavirus but leaders see blue skies ahead.
Flight Centre is optimistic about the 2021/22 year as vaccination programs gain traction in Australia and travel restrictions ease.
There was no final dividend.
Shares were up 4.04 per cent to $17.01.
The big miners - BHP, Fortescue and Rio Tinto - had losses of a little more than one per cent.
In the other heavyweight category, banking, results were mixed. The Commonwealth gained 0.67 per cent to $100.99. The others of the big four lost less than one per cent.
Shares going ex-dividend included Coles, JB Hi-Fi, gold miner Newcrest and property advertising group REA.
The Australian dollar was buying 72.52 US cents at 1725 AEST, higher than 72.42 US cents at Wednesday's close.
ON THE ASX
* The benchmark S&P/ASX200 index closed lower by 40.7 points, or 0.54 per cent, to 7491.2 on Thursday.
* The All Ordinaries closed down 39.2 points, or 0.5 per cent, to 7770.4.
* At 1725 AEST, the SPI200 futures index was lower by eight points, or 0.11 per cent, to 7418 points.
One Australian dollar buys:
* 72.52 US cents, from 72.42 cents on Wednesday
* 79.88 Japanese yen, from 79.54 yen
* 61.65 Euro cents, from 61.71 cents
* 52.79 British pence, from 52.83 pence
* 104.29 NZ cents, from 104.35 cents.