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Small caps hit by big market meltdown with tech stocks hammered

1 hour ago 4.9.2020

stock head.com.au

The Australian stock exchange is suffering its worst day in months, with a sea of red across the board, and small caps are enduring the same pain as their larger brethren.

At midday the ASX Small Ordinaries index (ASX:XSO) of Australia’s 101st to 300th biggest companies – those in the ASX300, but not the ASX100 – was down 2.4 per cent – only fractionally less than the 2.5 per cent decline for ASX20 index (ASX:XTL) of Australia’s 20 biggest companies.

“We’ve taken a hit,” said CommSec market analyst Steven Daghlian. “It’s a messy performance this week.”

It’s shaping up to be the ASX’s worst day since June 11, he said.

But it’s not surprising given that the S&P500 index in the US plunged three and a half per cent overnight, with tech-heavy NASDAQ crashing five per cent, Daghlian said.

There’s no single reason for the sell-off, Daghlian said. But tech companies have seen an astounding run-up this year, with Amazon (NASDAQ:AMZN) up 80 per cent.

“It was bound to happen eventually, that there would be a break in the improvements,” he said.