The ASX is looking at its second 60 point fall in as many days after Wall Street suffered its biggest one day slide in eight months overnight Wednesday amid growing tensions about the performance of President Donald Trump.
The overnight share futures market saw a fall of around 6 in the ASX 200, on top of the 1.1% or 64 point fall on Wednesday.
US bond yields saw their biggest slide in yields for 11 months, the US dollar lost the last of its post Trump election gains and the Aussie dollar jumped to well over 74 US cents as a result.
Australia saw the biggest sell off in Asia on Wednesday with the 1.1% slump. The selling continued into European trading with London the best performed, off just 0.25% and losses of 1% to 2% elsewhere.
US investors sold shares, fearing President Donald Trump’s ability to push through his pro-growth policies has been sidelined by the deepening political controversy.
The Dow Jones Industrial Average fell 370.12 points, or 1.76%, to 20,609.63, the S&P 500 lost 43.35 points, or 1.81%, to 2,357.32 and the Nasdaq Composite dropped 158.63 points, or 2.57%, to 6,011.24.
Bank stocks, which outperformed in the post-election rally, were the worst hit. The S&P 500 bank sub-sector was down 4.5% while the broader financial sector sank 3.4%, led by a 6.2% decline in Bank of America shares, a 5% slump in Goldman Sachs and a 4% drop for JPMorgan.
The Stoxx Europe 600 Index fell 1.2%, after ending little changed in the previous session and the MSCI All-Country World Index lost 1.2% from the previous record close.
Gold jumped sharply – up more than $US20 an ounce, or 1.9%, to around $US1,260 an ounce in New York. Oil edged up to just under $US49 a barrel because of another small fall in US stocks, and iron ore prices roses, up $US1.03 to $US62.83 a tonne in a reversal of the recent slide.
And in a sure sign of the rising fear levels the yield on the 10-year Treasury bond was off 10 basis points at 2.22%, the biggest fall in the yield for 11 months.
The weakness came after the New York Times late Tuesday reported that President Trump in February had asked then FBI director, James Comey to stop his investigation into former national security adviser,Michael Flynn.
The report cited a memo from Comey and left trump and the White house floundering for a reply. It added to the pressure on the President who late last week had said in a media interview that he had sacked Comey because of “the Russian thing” a reference to the FBI’s ongoing investigation into links between the Trump election campaign and Russia – links which seem to have continued into the White House.
That has raised questions about the president’s ability to pursue the pro-market policies whose prospects for implementation have driven stocks to record levels.
