ASX 200 Takes A Battering In September: Losses Add Up To 7.5pc In A Month

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September has been tough for the ASX 200, with a 7.5 per cent decline in value—the worst month of the benchmark in the previous three months.

The growth rate for the global stock markets is decreasing as people living in the United States start worrying about a possible recession. This change happens because the Federal Reserve isn’t providing enough information to ease these fears about more interest rates.

On Friday, the ASX 200 dropped 1.3 per cent to finish at 6,474 points.

“It’s been a pretty tough week, and it looks like it’s going to be a tough month,” said David Bassanese, chief economist at BetaShares.

“A lot of the issues that have been dogging the market all year are starting to come to a head.”

The bottom performers in the stock market included Carsales and Cochlear, which saw declines of 7.8% and 6.6%, respectively.

Most of the sub-indices closed with a loss. The financials index, which includes heavyweights like JP Morgan and Goldman Sachs, was down 2.3 per cent.

Concurrently, the Australian dollar was struggling against the greenback, exchanging at only 64.95 US cents. This is due to increasing projections that rates will begin to rise soon.

After the Fed did not indicate rate increases in the US, investors sold another round of assets. The fact that investors were selling again following a lack of communication from Fed officials regarding the United States recession worries has left traders cautious about a possible downturn.

“The US Fed is starting to bite here, and I think that’s what’s causing the ASX 200 to fall,” said Mr Bassanese. “If you don’t have the Fed’s clarity, then people will be selling assets.”

The ASX 200 has now lost around 7.5 per cent since hitting a high. In other words, the country’s central bank is anticipated to raise interest rates by another 50 bps in October, bringing it one step closer to a global recession.

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