Australian stocks plunged into bear market territory on Tuesday, as rising economic risks from the fast-spreading coronavirus and a recent plunge in oil prices clouded the global economic outlook.[BENGALURU] Australian stocks plunged into bear market territory on Tuesday, as rising economic risks from the fast-spreading coronavirus and a recent plunge in oil prices clouded the global economic outlook.
The S&P/ASX 200 index fell as much as 3.9 per cent to its lowest since Dec 27, 2018, before cutting losses to trade 0.7 per cent lower at 5,720.60 by 0021 GMT on bargain-hunting. At the session low, the index was down more than 23 per cent from a record high hit in February. "I think there is a little bit of bargain-hunting around. Yesterday was a pretty brutal day, so people are happy to breathe a sigh of relief," said Henry Jennings, a senior analyst and portfolio manager at Marcustoday Financial Newsletter.
Fears of a global recession due to the coronavirus outbreak coupled with a near 25 per cent slump in oil prices on Monday have sent investors into panic mode, with Wall Street witnessing overnight its biggest one-day loss since the 2008 financial crisis. Crude prices suffered their biggest daily rout since the 1991 Gulf War in the previous session, as top producers Saudi Arabia and Russia began a price war that threatens to overwhelm global oil markets with supply.