Preston 3May2023(TIE)Following the unexpected RBA rate hike and the renewed crisis among US regional banks since Tuesday, the sell-off in Australian shares has been unrelenting. The S&P/ASX 200 share index in Australia has fallen 1.4% to reach a near five-week low of 7160.7 on Wednesday, after dropping 0.9% on Tuesday.
This marks the largest one and two-day declines for the ASX since the US regional banking crisis first made headlines around five weeks ago.
The energy sector has been hit the hardest, with crude oil prices falling 5% due to disappointing US economic data and the possibility of a credit crunch due to the regional bank crisis. Although Australian banks are better capitalised than US regional banks, they are still facing criticism, with the four majors dropping by 2-2.2%, with NAB being the weakest.
The risk of earnings downgrades is growing amid a worsening macroeconomic environment and sustained interest rate hikes. As a result, Amcor has fallen by 11%, while Ramsay has dropped by 5.9%.