The ASX 200 has plummeted 3.8 per cent immediately upon opening, wiping an estimated $66 billion from an already wounded stock market.
Investors are bracing for a day of heavy losses after more than $120 billion was erased from the benchmark S&P/ASX 200 yesterday as oil price tensions grow between Russia and Saudi Arabia.
Ongoing coronavirus concerns – including Italy having to ban public gatherings and Qantas having to slash flights – are adding to a deadly cocktail smashing stock prices.
Overnight Wall Street dropped immediately by more than 7 per cent, triggering the market's 15-minute pause pact to bring calm back to panic-selling.
The drop was so dramatic traders began calling overnight in the US "Black Monday".
Shortly after the drop the ASX200 recovered, down just 0.56 per cent at 10.30 AEDT.
Locally, Australia's top economists have begun forecasting to clients that the country is likely to enter a momentary recession in the next six months before continuing a path of slow growth.
Westpac's Chief Economist Bill Evans told investors in a client note that he expects a "technical recession" that will have little impact on ordinary Australians.
"On a quarterly basis we expect the economy will contract in both the first and second quarters by 0.3 per cent and 0.3 per cent respectively to be followed by a rebound of 1.4 per cent and 0.8 per cent respectively in the third and fourth quarters," Mr Evans wrote.
"That growth profile constitutes a technical recession but given the expected recovery in the second half of the year it is much more realistic to characterise the situation as a 'major disruption' to growth rather than the style of recession that Australia has experienced in the past."
Prime Minister Scott Morrison will address business leaders in Sydney today about a stimulus package to help the economy.
Mr Morrison is expected to reassure the public that the stimulus, worth about $10 billion, will not be funded by cuts to essential services such as schools, hospitals and the National Disability Insurance Scheme.
The package is expected to be issued later this week.
The Aussie dollar is currently buying 65.97 US cents at 1015 AEDT on Tuesday, up from 65.46 US cents at the market close on Monday.
Source: 9News https://www.9news.com.au/national/asx200-falls-66-billion-as-oil-price-war-and-coronavirus-smash-values/3c94abf5-6979-4d05-b749-1bb375199848