ASX: Billions wiped off share market
More than $26 billion has been wiped off the Australian share market as it plunged to a seven-week low amid worries about a US interest rate announcement and the Brexit vote.
While traders predict the US central bank will not raise interest rates this week, there are fears Britain is on the verge of voting to leave the European Union next week.
CMC chief market analyst Michael McCarthy said $26.7 billion of value had been destroyed on Tuesday and he predicts further falls after the market broke through a key technical barrier.
"We've seen the market plummet and it does look like, at least from a technical point of view, we could have further falls to make over the coming sessions," Mr McCarthy said.
European shares fell to their lowest level in more than three months amid fears Britain is on the verge of voting to leave the European Union next week.
"It's one of the global market risks on the horizon," Mr McCarthy said.
"I don't think this is a Brexit-specific sell-off. This is reflecting a whole lot of different factors at play in the market."
Interest rate decisions from the US Federal Reserve and the Bank of Japan were also weighing on investors sentiment, he said.
"There's certainly no done deals here and the potential for a surprise from either The Fed or the Bank of Japan is real and that's contributing to some of the skittishness across markets," Mr McCarthy said.
Locally, the National Australia Bank's latest monthly business survey released on Tuesday showed business conditions were flat in May.
Improvements in sales and profitability for Australian businesses offset another fall in business confidence and a disappointing fall in employment demand, the survey showed.
At 1440 AEST on Tuesday, after the local market was closed Monday for the Queen's Birthday long weekend, the benchmark SP/ASX 200 index was down 108 points, or 2.03 per cent, at 5,204.5 points, its lowest since April 27.
The broader All Ordinaries index was down 107 points, or 1.98 per cent, at 5,284.6 points.