The ASX’s performance follows in the wake of the U.S. market last week.
The Australian stock market has had a challenging start to the week, diving more than 3 percent amid weak economic data and global recession fears.
Big names on the ASX, comprising the biggest 200 companies in the country, include Commonwealth Bank, Qantas, Woolworths, Coles, and BHP.
All major sectors fell on Aug. 5, including technology, finance, energy, real estate, telecommunication, materials, industrials, and health care.
The energy sector also dropped 3.24 percent.
Buy now, pay later share, Block, plunged a mammoth 10 percent in the afternoon on Aug. 5, while Zip sunk 9.5 percent.
Bucking this trend, PYC Therapeutics soared 8.25 percent, Magnetic Resources 5.76 percent, and Westgold Resources climbed 4.27 percent.
Major retail food chain Domino’s Pizza rose 2.38 percent.
Banks also had a rough day, with Commonwealth Bank of Australia down 3.99 percent, Westpac sliding 4.02 percent, National Australia Bank down 3.89 percent, and ANZ down 3.81 percent.
The fall in Australia followed in the footsteps of global markets, with all major U.S. indices sliding in Aug. 2’s trade.
Weak Data Spooks Investors into Selloff
Australia’s benchmark index often follows the trend of U.S. markets, including in the finance and technology sectors.
In the United States last week, the benchmark S&P 500 slid 1.84 percent, the Dow Jones dropped 1.51 percent, and NASDAQ 2.43 percent. In Europe, the stock market also suffered drops.
“The nonfarm payrolls data showed 114,000 jobs were added in July, significantly undershooting the market’s expectation for an increase of 175,000,” the ANZ research team said.
ANZ researchers noted the unemployment rate jumped 0.2 percentage points to 4.3 percent, the highest since late 2021, and above the 4.1 percent expected by the market.
“The rise triggered the ‘Sahm-rule’ which posits that a recession is almost always underway if the three month average unemployment rate (4.1 percent) rises by more than 0.5 percentage points from its lows in the past 12 months (3.6 percent),” economists noted.
“The July labour market report rattled markets, with the nonfarm payroll addition pace now below the pre-pandemic average,” economists commented.
This appeared to impact Australian energy stocks with the benchmark energy index (ASX: XJO) down 3 percent.
However, oil prices are bouncing back on Aug. 5, with crude oil prices recovering 0.29 percent at the time of writing.