Aust shares plunge on Mideast tension, rising yields

The Australian share market has cratered across the board, weighed by surging bond yields and the prospect of more conflict in the Middle East.

The benchmark S&P/ASX200 index on Tuesday finished down 140 points, or 1.81 per cent, to an eight-week closing low of 7,612.5, while the broader All Ordinaries dropped 147.1 points, or 1.84 per cent, to 7,862.3.

It was the ASX200's fourth down day in a row and second-worst drop in 13 months, just behind a 1.82 per cent drop on March 11. 

"What a day, huh," Moomoo market analyst Jessica Amir told AAP.

"So we're already down four per cent from our high and there's room for us to fall further. 

"Markets don't go up in a straight line and the technical indicators are saying we're not done with the selling."

Ms Amir attributed the drop to better-than-expected US retail sales data for March released overnight by the Commerce Department.

Turnover was up 0.7 per cent, compared with consensus forecasts of 0.3 per cent, adding to recent data indicating the world's biggest economy is still strong and does not need to be propped up by rate cuts. 

The futures market gives the highest odds that the Federal Reserve will begin cutting rates in September, rather than the mid-June cuts it deemed most likely just a few weeks ago. 

That reset of expectations led to soaring bond yields, which put pressure on equities. 

Australian government three, five and 10-year yields climbed to their highest levels since December.

The United States dollar hit a five-month high against a basket of other currencies, while gold traded at $US2,371 an ounce.

In Israel, Prime Minister Benjamin Netanyahu reconvened his war cabinet and the country's top general said Israel would retaliate after Iran launched a massive missile and drone barrage at the weekend.

IG market analyst Tony Sycamore called it all a "perfect storm" that caused carnage on the local bourse, overshadowing better-than-expected first-quarter gross domestic product data out of China.

Every sector of the ASX closed at least one per cent lower, with consumer discretionary falling the most - 2.4 per cent - as Wesfarmers dropped 2.3 per cent and Harvey Norman retreated 3.8 per cent.

Just a dozen companies in the ASX200 gained ground. Four were flat and the other 184 closed lower.

Star Entertainment Group was the biggest loser, falling 14.4 per cent to a fresh all-time of of 41.5c on a broker downgrade and more damning revelations at a second NSW inquiry on its suitability to hold a casino licence.

Secret emails disclosed on Monday indicated Star's former chief executive Robbie Cooke and chair David Foster had plotted "going to war" with the regulator, while an anonymous whistleblower told the inquiry that the company's culture was toxic.

The big four banks were deep in the red, with Westpac falling 2.3 per cent to $25.55, ANZ dropping 2.2 per cent to $28.36, CBA retreating 2.1 per cent to $112.20 and NAB falling 1.7 per cent to $33.36.

The heavyweight mining sector fell two per cent, with Rio Tinto dropping 2.9 per cent to $128.70, Fortescue falling 2.8 per cent to $25.03 and BHP retreating 1.8 per cent to $44.97.

The Australian dollar dropped to a five-month low against its surging US counterpart, buying 64.20 US cents, from 64.87 US cents at Monday's ASX close.

ON THE ASX:

* The benchmark S&P/ASX200 index on Tuesday finished down 140 points, or 1.81 per cent, at 7,612.5

* The broader All Ordinaries dropped 147.1 points, or 1.84 per cent, to 7,862.3

CURRENCY SNAPSHOT:

One Australian dollar buys:

* 64.20 US cents, from 64.87 US cents at Monday's ASX close

* 99.13 Japanese yen, from 99.86 yen

* 60.46 Euro cents, from 60.89 Euro cents

* 51.62 British pence, from 52.01 pence

* 109.05 NZ cents, from 109.10 NZ cents

License this article

What is AAPNews?

For the first time, Australian Associated Press is delivering news straight to the consumer.

No ads. No spin. News straight-up.

Not only do you get to enjoy high-quality news delivered straight to your desktop or device, you do so in the knowledge you are supporting media diversity in Australia.

AAP Is Australia’s only independent newswire service, free from political and commercial influence, producing fact-based public interest journalism across a range of topics including politics, courts, sport, finance and entertainment.

What is AAPNews?
The Morning Wire

Wake up to AAPNews’ morning news bulletin delivered straight to your inbox or mobile device, bringing you up to speed with all that has happened overnight at home and abroad, as well as setting you up what the day has in store.

AAPNews Morning Wire
AAPNews Breaking News
Breaking News

Be the first to know when major breaking news happens.


Notifications will be sent to your device whenever a big story breaks, ensuring you are never in the dark when the talking points happen.

Focused Content

Enjoy the best of AAP’s specialised Topics in Focus. AAP has reporters dedicated to bringing you hard news and feature content across a range of specialised topics including Environment, Agriculture, Future Economies, Arts and Refugee Issues.

AAPNews Focussed Content
Subscription Plans

Choose the plan that best fits your needs. AAPNews offers two basic subscriptions, all billed monthly.

Once you sign up, you will have seven days to test out the service before being billed.

AAPNews Full Access Plan
Full Access
AU$10
  • Enjoy all that AAPNews has to offer
  • Access to breaking news notifications and bulletins
  • Includes access to all AAPNews’ specialised topics
Join Now
AAPNews Student Access Plan
Student Access
AU$5
  • Gain access via a verified student email account
  • Enjoy all the benefits of the ‘Full Access’ plan at a reduced rate
  • Subscription renews each month
Join Now
AAPNews Annual Access Plan
Annual Access
AU$99
  • All the benefits of the 'Full Access' subscription at a discounted rate
  • Subscription automatically renews after 12 months
Join Now

AAPNews also offers enterprise deals for businesses so you can provide an AAPNews account for your team, organisation or customers. Click here to contact AAP to sign-up your business today.

SEVEN DAYS FREE
Download the app
Download AAPNews on the App StoreDownload AAPNews on the Google Play Store