The S&P/ASX 200 Index (ASX: XJO) has started the week with a fresh new wave of selling and has dived 6% on open this Monday morning. It has since recovered slightly and is looking at a 5.29% loss at the time of writing to 5,246.3 points.
After Friday's incredible recovery from an 8% plunge, many investors were no doubt hoping the worst was over. But after a dramatic escalation in monetary easing from the US overnight, markets are once again in full panic mode. The US Federal Reserve has now slashed interest rates again by 0.5% to virtually zero and there is little doubt the Reserve Bank of Australia (RBA) will be following this course in the coming months (if not next month).
Interest rate cuts often spur higher stock market prices, but this time it's different as the world recognises the 'emergency' nature of these cuts – hence the falls this morning. It also comes after Prime Minister Scott Morrison announced fresh new travel restrictions and a ban on public gatherings of more than 500 people late last week.
How are ASX shares looking this morning?
As you would expect, not too well. The ASX banks are amongst the largest fallers, with Australia and New Zealand Banking Group Ltd (ASX: ANZ) leading the charge with an 8.19% to $17.26 at the time of writing. Lower interest rates are anathematic to banking profits, so investors are not viewing the banks' kindly right now.
Westpac Banking Corp (ASX: WBC) and National Australia Bank Ltd (ASX: NAB) are also copping the heat with falls of 7.12% (to $16.83) and 7.5% (to $17.02) respectively.
Commonwealth Bank of Australia (ASX: CBA) is being spared the worst of the brunt, with a 6.1% drop at the time of writing to $62.36 a share.
Meanwhile, some other blue-chips are also feeling the pain. BHP Group Ltd (ASX: BHP) shares have lost 4.34% to $25.56 – a three-year low. South32 Ltd (ASX: S32) shares are also being put through the wringer with an 8.27% drop to $1.77.
The CSL Ltd (ASX: CSL) share price isn't immune from the market volatility either. CSL shares have had a 5.03% drop this morning and are back under the $300 threshold at $297.48.
Foolish Takeaway
It seems we're far from being out of the woods on the ASX and this week is looking like another wild ride for all share market investors. Just remember what investing is all about during these tough times – in many cases not doing anything is likely to be the best course for action!
