The S&P/ASX 200 (ASX: XJO) suffered its worst day in months falling 1.9% on Thursday with 95% of the largest 200 companies share price’s dropping.
Every sector was lower and significantly so, with the major selling pressure hitting the popular smaller companies, technology, and consumer sectors.
The tech sector fell 3.2% on the back of falls in popular names like Nearmap Ltd (ASX: NEA), down 4.5%, and Megaport Ltd (ASX: MP1), down 5.4%.
It was a similar story for materials, down 2.1%, after the iron ore price fell another 3.5% overnight.
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Flight to quality
On a positive note, ResMed CDI (ASX: RMD) was a rare winner, with the sleep apnoea product distributor jumping 1.8%.
As highlighted in this column earlier this year, quality will be the key to navigating what will likely be a more volatile environment for the next few years, with defensive but profitable companies operating in consumer staples, healthcare and property likely to outperform.
This was certainly the case on Thursday , with all three falling less than the market, down 0.7%, 1.3% and 1.1%.
Small-caps tumble, buy the dip
Smaller companies felt the brunt of the market heat with the ASX Small Ordinaries dropping 2.4%, compared to the ASX 50 which fell 1.7%.
There did appear to be some support as the session closed, with the market rallying off its lows.
This has been the story of 2021, with dip buyers ultimately seeing value in shares given the income-starved world we live in.
WA’s massive surplus, NSW reopening plan
There was positive news on the economic front today with the WA Government announcing a significant surplus for the financial year. $5.6 billon in excess cash was delivered after the state benefitted from $11.3 billion in royalties on the back of a soaring iron ore price.
In NSW, the Premier also outlined a reopening plan, which despite the positive news likely delivered a realisation that the economy may not ‘snap back’ to normal as quickly as many are predicting.
ASX 200 today
Looking ahead, the ASX 200 is set to open higher on Friday despite all three US benchmarks finishing lower overnight.
To find out more, check out Rask Media’s daily US stock market report.
