ASX 200 posts biggestfall on record, Reserve Bank flags further measures amid coronavirus fears

The ASX 200 has posted its biggest dailypercentage fall on record, after coronavirus fears fuelled a steep sell-offthat accelerated into the close.

ASXat Monday's close:

· The All Ordinaries index has lost 9.5 per cent to 5,058 points

· The RBA has flagged further policy measures, says it"stands ready to purchase Australian government bonds"

· The corporate regulator has put limits on the number of stockmarket trades large firms can make

The benchmark index closed down 9.7 per cent at 5,120 points onMonday, falling more than 2 per cent in the final minutes of trade.

"It is new territory, unfortunately it is a record youdon't want," market analyst Evan Lucas from InvestSmart told The Business.

The ASX 200 is now down 30 per cent from its peak, posted justweeks ago on February 20.

The broader All Ordinaries ended 9.5 per cent down, its largestone-day fall since the 1987 stock market crash, losing $165 billion in value.

Just three stocks out of the top 200 eked out a gain: Fisher& Paykel Healthcare (+4.2pc), Telstra (+1.8pc) and Domino's Pizza (+0.2pc).

The big four bank stocks all lost more than 10 per cent, led bya 12.5 per cent fall for ANZ shares.

Energy stocks were hard hit, including Oil Search (-19.8pc),Santos (-17.7pc) and Woodside (-14.4pc).

The rout on travel-related companies continued, including Webjet(-22pc), Corporate Travel (-15.4pc) and Flight Centre (-15.8pc).

RBA 'stands ready' to pump more money intosystem

Meanwhile, the Reserve Bank of Australia has said it"stands ready" to pump more money into Australia's financial systemto keep it functioning as global investors baulk at the coronavirus pandemic.

Debt kills in coronavirus contagion

Coronavirus looks set to cause deep global economicdisruption, and those companies that have binged on cheap debt are the onesleast likely to survive the crisis, writes Ian Verrender.

It issued a statement saying it would do what it must to keepAustralia's financial markets operating.

"The Reserve Bank stands ready to purchase Australiangovernment bonds in the secondary market to support the smooth functioning ofthat market," RBA governor Philip Lowe said.

The bond market is a key pricing benchmark for Australia'sfinancial system.

The RBA said it will be announcing further policy measures onThursday to support the economy.

The Australian dollar fell to its lowest level since the globalfinancial crisis following the RBA's statement.

"We're so close now it's hard to rule it out dipping below60 US cents," Westpac senior currency strategist Sean Callow said.

"The Reserve Bank has said for a long time it thinks it'svery helpful to have a weak Aussie dollar."

Westpac now expects the RBA to cut the cash rate from 0.5 percent to 0.25 per cent on Thursday.

Governor Philip Lowe said the central bank would be conductingone-month and three-month repurchase (repo) operations each morning "untilfurther notice" to inject the system with extra emergency cash.

The bank would also conduct longer-term repo operations of sixmonths' maturity or longer at least weekly, and for as long as necessary.

Under a repo arrangement, financial institutions can sellhighly-rated debt securities to the RBA on the agreement they repurchase thesecurity at a future time and with a pre-arranged price.

It is like a secured loan, with the difference between thepurchase and repurchase prices representing the interest earned on thetransaction.

"Financial regulators and the Australian Government areworking closely together to help ensure that Australia's financial marketscontinue to operate effectively and that credit is available to households andbusinesses," Dr Lowe said.

Coronavirus not the only cause of falling Aussie dollar

Interest rates, trade tensions and the recent bushfiresare other factors contributing to the fall of the Australian dollar.

The news comes after the US FederalReserve slashed its interest rate by a full percentage point tonearly zero to help the world's biggest economy deal with the impact of the COVID-19 pandemic.

Economists from ANZ viewed the RBA's statement as part of itsrole in supporting the functioning of the market, rather than a formalannouncement of quantitative easing (QE).

"Having said this, another rate cut and QE seem inevitablegiven the impact the extended measures to manage the spread of the coronaviruswill have on the Australian economy," ANZ head of Australian economicsDavid Plank said.

The Federal Government is already considering a second stimulusplan to support Australia's economy as global economic activity continues todeteriorate.

Prime Minister Scott Morrison will holding meetings withcabinet ministers in key sectors in preparation for tomorrow night's national cabinet meeting.

The Government is considering further economic support forbusinesses and households to cushion the impact of the increased emergencyresponse measures it announced yesterday.

ASIC limits share trades amid record volumes

The corporateregulator has put new limits on the number of shares trades large firms canmake, as it deals with a "significant backlog ofwork" due to a surge in stock market volumes.

"Australian equity markets have seen record trading volumesin the last two weeks," ASIC said in a statement.

Second wave of economic chaos

The coronavirus outbreak is expected to cost theAustralian economy billions, with the second-order impact to be felt acrosssupply chains, as many factories remain closed in China.

"In addition to increasing volumes, Australia's equitymarkets have seen exponential increases in the number of trades executed, witha particularly large increase in trades last Friday."

The regulator said there was no disruption to trade on Friday,but there was unfinished work for disalloweds and traders to deal withover the weekend.

"If the number of trades executed continues to increase, itwill put strain on the processing and risk management capabilities of marketinfrastructure and market participants," ASIC said.

Until further notice large stock broking firms and institutionswill now be required to limit the number of trades they make each day by up to25 per cent below the number of trades executed on Friday.

"We do not expect these limits to impact the ability of retailconsumers to execute trades," the regulator said.