Australian shares opened sharply lower on Tuesday as global market volatility weighed on investor confidence.
The benchmark S&P/ASX 200 index fell 1.5% to 8,500 points in early trading, with local investors reacting to heavy selling in international markets. Australian shares had not traded since Friday due to Monday’s public holiday.
The decline followed a significant selloff in technology stocks in South Korea and the United States, which contributed to broader weakness across global markets late last week.
Although Wall Street recorded a partial recovery on Monday, investors remained cautious amid ongoing concerns about elevated inflation and stretched market valuations.
Oil prices have also continued to rise following renewed conflict in the Middle East, reducing expectations that the Strait of Hormuz will reopen soon and adding pressure to equity markets.
Chris Strazzeri, dealing manager at trading platform Moomoo, said Wall Street’s rebound provided a positive signal but stopped short of fully restoring confidence.
“The technology sector’s rebound should provide some support, but with geopolitical risks still lingering and investors looking for greater clarity, today’s session may be characterised by cautious optimism rather than a broad-based rally,” Strazzeri said.
Meanwhile, the Australian dollar traded around US70.4 cents, hovering near its lowest level in two months.