The Australian share market has been routed again, with the worst losses in two years for the mining and energy sectors - and one veteran trader saying the selloff could be just the beginning.
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The benchmark S&P/ASX200 index on Monday closed down 105.3 points, or 1.6 per cent, to a three-month low of 6469.4. The broader All Ordinaries fell 121.2 points, or 1.79 per cent, to 6667.5.
The ASX200 is now down 15.1 per cent from its April 20 high and has lost ground for five of the last six sessions, with the losses in the past three sessions all exceeding 1.5 per cent.
"There's a lot of talk amongst traders about how this might unfold," said Sydney-based independent trader Michael McCarthy.
"I mean, we've just had the strongest bull market in history - and we're now looking at the unwinding of the largest experiment in monetary policy that's ever been conducted globally.
"So working out what the shape of this bear market is, is not an easy task, even for full-time professionals.
"There's no doubt that this is a bear market, but as one trader put it to me, it's more like a balloon deflating, than a balloon popping."
Mr McCarthy also noted extreme volatility going on in the currency markets, where the US dollar has been hitting new highs against the yen while the pound sterling has been plummeting in recent days.
"Markets are going through a major readjustment that could take months or years - and what we're seeing at the moment might just be the beginning," Mr McCarthy told AAP.
A big test is whether the ASX200 can hold at around 6400 or just below it, a level that served as support at both the end of 2020 and this past June, he said.
"This is the level that the market bounced from - so the next couple of trading sessions are going to be crucial for the technical outlook for the market," he said.
Despite the big sell-off, five of the ASX's 11 sectors finished in the green on Monday, with healthcare gaining 2.0 per cent and smaller gains for both consumer sectors and technology.
But the energy sector dropped 6.3 per cent in its worst day of losses since the double-digit ones in March 2020, as Brent crude fell nearly two per cent to a nine-month low of $US84.75 a barrel.
Woodside finished down 5.0 per cent to $30.20, Santos retreated 7.3 per cent to $6.88 and the year's top ASX200 gainer, Whitehaven Coal, plummeted 14.0 per cent to $7.91.
The mining sector was down 5.3 per cent, its worst day since a 6.8 per cent sell-off on May 1, 2020.
BHP fell 5.2 per cent to a three-month low of $36.20, Fortescue Metals dropped 4.9 per cent to $15.94 and Rio Tinto retreated 5.6 per cent to $87.78.
Goldminer Newcrest was down 5.9 per cent while Evolution and Northern Star had both dropped by over seven per cent to hit multi-year lows. Lithium miner Pilbara fell 9.1 per cent.
The heavyweight financial sector was much less badly scathed, dropping a modest 0.7 per cent. CBA and NAB were basically flat, at $93.61 and $29.35, while ANZ dropped 1.5 per cent to $23.04 and Westpac declined 1.1 per cent to $21.18.
Ramsay Health Care fell 2.4 per cent to $59.08 after announcing takeover talks led by US private equity group KKR had collapsed for good. The consortium had at one point mentioned a price of $88 per share.
Costa Group fell 14.2 per cent to $2.18 after the country's leading fruit and veggie grower announced that its chief executive and managing director, Sean Hallahan, would step down effective immediately.
The announcement didn't directly address why his departure was so sudden, but quoted Mr Hallahan as saying it had been an "intense couple of years in agriculture," and the company's chairman noted that the pandemic had taken a "large toll on the business and personal lives of individuals".
Back in the mining sector, Syrah Resources fell 18.3 per cent to $1.56 after announcing an illegal industrial action by a small number of its workforce in Mozambique had disrupted operations at its graphite mine there.
Meanwhile, the Australian dollar had hit its lowest level since May 2020 against its rampaging US counterpart.
The Aussie was buying just 65.18 US cents, from 66.17 US cents on Friday, and had briefly traded as low as 64.83.
The Aussie was at a five-year high against the pound sterling, which is taking a beating on scepticism over Prime Minister Liz Truss's unfunded tax cuts.
ON THE ASX:
* The benchmark S&P/ASX200 index on Monday dropped 105.3 points to 6469.4, a fall of 1.6 per cent.
* The broader All Ordinaries dropped 121.2 points, or 1.79 per cent, to 6667.5.
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 65.18 US cents, from 66.72 US cents at Friday's close
* 93.78 Japanese yen, from 94.10 yen
* 67.31 Euro cents, from 67.53 cents
* 60.79 British pence, from 59.07 pence
* 113.56 NZ cents, from 113.49 cents.
Australian Associated Press