Thursday, May 23, 2013

$25 billion wiped off market

The S&P / ASX 200 Index (^AXJO) (XJO.AX) has dropped by 2%, closing at 5,062.4, losing more than $25 billion in value. The four major banks were crushed, along with the big miners and most sectors, with just the IT sector managing to keep its head above water.

It was an ominous start after Wall Street fell overnight, following news that the US Federal Reserve could taper-off its bond buying. The Dow Jones dropped 0.5%, while the S&P 500 saw a loss of 0.8% on that news. On top of that, we saw some weak Chinese manufacturing data, with growth slowing for the first time in seven months. Markets were also hit by news that Ford is exiting the car manufacturing industry in Australia in 2016.