Earlier on Tuesday, the Australian share market ended deeply in the red losing $56 billion in value, as the Glencore crash raised fears about companies across the commodities sector.
Fears about the heavily indebted Glencore’s ability to survive caused the rout in its share price and a surge in the cost of insuring its debt, leading many analysts to question whether this might be the commodity sector’s Lehman Brothers moment.
By the close, the benchmark ASX 200 index was down 3.8 per cent to 4,918 and the All Ordinaries was off 187 points to 4,958, cracking below 5,000 for the first time since mid-2013.
BHP Billiton shares tumbled below $22 for the first time since the global financial crisis.
All four major banks were down over 3.5 per cent and retail plummeted, with Woolworths and Wesfarmers both down more than 3 per cent, and Myer down 4.9 per cent.
But the Federal Treasurer Scott Morrison said the economy was performing “incredibly well”, despite a plunge in the Australian stock market.
“These are obviously difficult days and there’s lots of headwinds we already know that,” he told Sky News.
“I think the issue for the Australian economy and Australians more generally [is] we know that we have to swim against the tide in many respects, but I think we are swimming against the tide … incredibly well.”
We are certainly “swimming against the tide” by backing fossil fuels and ignoring renewables but the “incredibly well” part is just the new rhetoric. Everything is not rosy just because Scott says so.
Top ten losers on the ASX 200:
- Paladin Energy -13.2%
- Karoon Gas -11.1%
- Origin Energy -10.4%
- AWE -9.2%
- Santos -9.1%
- Liquefied Natural Gas -9.1%
- Whitehaven Coal -9%
- Beach Energy -8.7%
- BlueScope Steel -8.1%
- M2 Group -7.5%
Removing the carbon tax has obviously not brought the results this government was hoping for. Not even the resurrection of Malcolm can make the markets believe all is well. These businesses are suffering because the world is changing and it is time our government accepted the fact and got in the race.