ASX 200 closes 1.6% lower mirroring Wall Steet drubbing

Economic fluctuations and geopolitical worries have dominated investor sentiment so far this year.  Subsequently, sinusoidal trends have continued across global share markets.

Recession warnings have been sparkling amid the war in Ukraine, lockdowns in China and an aggressive Federal Reserve have been hot topics of conversation each day.

Today back home in Australia, the Australian Bureau of Statistics (ABS) revealed that the Australian economy added 4000 new jobs in April taking the jobless rate to 3.9%, the lowest level in 48 years. March’s jobless rate was revised lower to 3.9% from the earlier reported 4%. Investors are now waiting to see if labour market contraction prompts a more aggressive approach by the central bank toward monetary policy tightening.

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How did ASX 200 perform?

In the opening minutes of trade, the ASX 200 opened 1.8pc lower after an overnight Wall Street tumble. blue chips opened sharply lower after a 4% fall for the S&P 500 in US trading overnight. By lunchtime, the benchmark index back home regained some ground and traded 1.6% lower.

Eventually at market close, the ASX 200 closed 1.6% lower, dropping 118.20 points to 7,064.50. Over the last five days, the index has gained 1.78%, but sits 4.53% above its 52-week low.

Today’ session was dominated by sharp declines for consumer-facing companies. Retailers seem worried that  higher costs would hit profits in the sector.

On the sectoral front, 10 of 11 sectors were lower. Healthcare was the only local share market sector to avoid a drop, gaining +0.13% and +1.61% for the past five days.

Who gained? Who lost?

The top performer today was Imugene (ASX:IMU), up 17.6%. It was followed by Aristocrat Leisure (ASX:ALL). For the half-year, the Company has reported a 41% growth in normalised NPATA, 37% ahead of (pre-Covid) 1H19 profit performance.

Other gainers of the day were PolyNovo (ASX:PNV), Unibail-Rodamco-Westfield (ASX:URW) and Evolution Mining (ASX:EVN). URW announced the rebranding of three Flagship centres, rolling out the Westfield brand to Parquesur in Madrid, Taby Centrum in Stockholm, and Galeria Mokotow in Warsaw this Fall.

On the other side, in the red zone of the ASX 200, Nufarm (ASX:NUF) was the top laggard, down over 8%, after it reported to have delivered 41% growth in underlying earnings for 1H22. Other stocks in this zone were Wesfarmers (ASX:WES), Pendal Group (ASX:PDL), JB Hi-Fi Limited (ASX:JBH) and Metcash (ASX:MTS).

Asian and global market

In Asia, stocks extended a selloff today, as fears of an economic downturn frayed sentiment and spurred a flight to havens including bonds. Besides, an uptick in Covid-19 cases in China seems to dampen earlier hopes of a quick easing.

The Asia-Pacific equity index shed about 2%, led by losses in Japan and in Chinese technology firms. South Korea’s Kospi index shed 1.8% and Hong Kong’s Hang Seng index fell 3%.

US and European futures retreated in the wake of a 4% plunge in the S&P 500 index, the biggest daily drop in almost two years. Overnight, Wall Street's downward spiral was alarming as investors grow increasingly worried about rising inflation and a possible economic recession. The Dow Jones Industrial Average lost 3.6%, the S&P 500 sank 4%, and the Nasdaq Composite skidded 4.7%.