In biggest one-day fall in decades, 30% of the value of shares has been wiped from the index in less than a month due to coronavirus-inspired panic selling

This article is more than 6 months old

This article is more than 6 months old

The Australian sharemarket tumbled 9.7% on Monday, the biggest one-day fall in decades for the benchmark ASX200 index, wiping out nearly four years of gains.

About 30% of the value of Australian shares has been wiped out in less than a month due to coronavirus-inspired panic selling, with an index that hit a peak of 7,162 on 20 February closing trade on Monday at 5,002.

A market that is now trading at levels last seen in March 2016 was dragged down on Monday by collapsing entertainment, travel and education stocks, but every sector shared in the pain.

Monday’s fall is the biggest since at least 1987’s Black Monday stock market crash.

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Casino groups Star Entertainment and Crown Resorts both crashed after announcing they would close every second poker machine in their facilities, with Star plunging 23.6% and Crown tumbling 11.2%. Poker machine maker Aristocrat was also in freefall, with its shares diving more than 20%.

Other stocks crunched by more than 20% included air travel website Webjet, education group G8 and KFC operator Collins Food, which told the market it had been ordered to close its outlets in the Netherlands due to the Covid-19 pandemic.

OOh Media, the outdoor advertising company and publisher of youth website Junkee, collapsed an even 20% after withdrawing its profit forecasts because of the virus crisis.

The big four Australian banks – ANZ, Commonwealth, NAB and Westpac – were all down more than 10% despite regulators announcing they stood willing to provide relief from rules that might curb their ability to keep extending credit to a small business sector that has been smashed by the crisis.

Junior airline Virgin Australia dived 12.7% amid rampant speculation – denied by the company – that it would need to raise more money from its shareholders or restructure its debt.

After the market closed, ratings agency S&P downgraded the airline’s credit rating from B+ to B-, citing “our view that the company’s operating environment may be deteriorating at a faster pace than Virgin Australia can implement initiatives to protect cash generation and balance sheet health”.

Air New Zealand, which is listed on the Australian exchange, went into a trading halt after announcing it would be cutting 85% of its international routes and sacking workers.

Qantas dropped a relatively modest 5%, but the fall on Monday means that since 20 February its share price has halved.

Just three stocks in the top 200 rose – Domino’s Pizza, Telstra and Fisher & Paykel Healthcare.