ASX 200 drops 0.9% after Wall Street tumble

Highlights

• ASX 200 closed lower, dropping 63.40 points or 0.94% to 6,700.20.
• Wall Street fell overnight, inflation fears unsettled investors globally.
• Investors await remarks by central bank leaders along with an update on US economic growth.

Today, a discouraging snapshot of US consumer confidence seemed to have stoked investor worries globally. The risk of sharply higher interest rates, pervasive inflation and ultimately a recession loom.

Investors are currently subjected to a persistent list of apprehensions around rising inflation that us adversely impacting businesses and consumers. Supply chain issues seem to worsen, thanks to restrictions in China owing to Covid-19. Additionally, businesses have been increasing prices on almost everything, especially as an after effect of Russia’s invasion of Ukraine.

On the economic end in Australia, retail sales were up, better-than-predictable 0.9% on a month on month basis in May. They surged 10.4% on the lockdown battered May 2021 too.

How did ASX 200 perform?

Today, Australian shares were set to drop as Wall Street sold off again. The benchmark ASX 200 was down 0.8% in early trade, with the healthcare sector down 1.5% and real estate down 1.9%.

Eventually, the ASX 200 snapped a four-day winning streak, tumbling 0.9%, or 63.4 points, to 6700.2. Over the last five days, the index has gained 2.95%, but is down 10.00% for the last year to date.

On the sectoral end, eight of 11 sectors ended lower. Financial was the best performing sector, gaining +0.27% and +3.54% for the past five days.

Who gained? Who lost?

The top performer today was Liontown Resources (ASX:LTR), up over 5%. It was followed by SkyCity Entertainment (ASX:SKC), up 3.9%. Next up was The Star Entertainment Group (ASX:SGR), up 3.3%. Other gainers of the day were Aurizon Holding (ASX:AZJ) and Viva Energy (ASX:VEA).

On the other side, in the red zone of the ASX 200, Tyro Payments (ASX:TYR) was the biggest laggard, its stock down over 16%. Other stocks in this zone included Imugene (ASX:IMU), Carsales.com (ASX:CAR), Silver Lake Resources (ASX:SLR) and Charter Hall (ASX:CLW).   

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Asian and global market

Stocks dropped in Asia, thanks to rehabilitated qualms of a low-spirited economic outlook as monetary policy stiffens in most parts of the world in a bid to contest high inflation.

Japan's Nikkei 225 was down 0.96%, and the Topix slipped 0.63%. China’s bourses were in the red too. MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.1%. Following suit, Korea's KOSPI was down 1.57%.

Overnight on the Wall Street, S&P 500 ended 2 per cent lower, The Dow Jones Industrial Average fell 1.6 per cent and the Nasdaq composite ended 3 per cent lower. The indexes got off to a good start, but the gains washed-out after the Conference Board conveyed that its consumer confidence index fell in June to its lowest level in over a year.

Investors now await remarks by central bank leaders like European Central Bank chief Christine Lagarde and Fed Chair Jerome Powell. Another update on the US economic growth is also likely soon. Meanwhile, Wall Street is prepping for the latest round of corporate earnings.