Why the ASX is Down 2% Today: A Brief Explanation

If you haven’t watched the markets for a while, or don’t subscribe to Markets & Money, you may be scratching your head looking at the ASX today.

At time of writing, the ASX is currently down 2.2%.

This is a major drop and has the ASX trading below 6000 for the first time since early June.

It is also part of a steep decline since Friday, 5 October, as seen below:

ASX 200 chart

Source: marketindex.com.au

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Markets & Money explains the ASX for you

Markets & Money has been covering the stories behind this fall consistently, reaching all the way back to March.

Let’s recap, going back from the most recent coverage:

A day before the plunge began we covered the difficulties the Aussie dollar was facing.

Two days before the ASX started plunging, we discussed the RBA interest rate and how it related to falling house values.

Before this we covered tightening credit conditions in Australia.

In September, Jason Stevenson covered the Federal Reserve’s coming interest rate hikes — explaining how the US economy ‘isn’t as rosy as it seems’.

Finally, way back in March, Selva Freigedo covered Italy’s election and what it would mean for markets.

Fall in ASX closely linked to US market

If you look at the big picture behind all of these stories, it becomes a bit easier to understand the fall in the ASX.

A lot of it comes from the US market.

But looking closer, you can see that the US market is responding to a number of factors.

US bond yields are high after the Federal Reserve raised interest rates.

Chinese growth has slowed.

Generally, there is more fear in the markets, as investors attempt to reduce risk.

Europe is beginning to teeter on another debt crisis, with Italy looking the most likely to trigger it.

Australia has simply mirrored the US with its trading today, as investors respond to a lot of the same factors.

So keep your eyes peeled for Markets & Money updates, it will help you get the big picture.

It may even have already saved you some money.


Ryan Clarkson-Ledward,
Markets & Money

PS: The Aussie Recession Survival Guide. Download your free copy now.

Ryan Clarkson-Ledward is a junior analyst for Markets & Money. Ryan has degrees in both communication and international business. His priority is bringing you the latest price updates on stocks through ASX updates, as well as supporting Sam Volkering with background research. As part of the team at Markets & Money his aim is to provide unbiased and relevant news for readers. Ryan’s work with Sam is designed to provide research that complements Sam’s analysis for small-cap and technology stocks. Together, their objective is to break through all the jargon and give you the hard facts to inform your investment decision-making. Ryan writes for:

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