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The share market slumped to a 15-week low before partially recovering as rising US futures sharpened hopes of a relief rally tonight.

The S&P/ASX 200 finished 69.5 points or 0.98 per cent in the red at 7051 after trading as low as 6939.5.

Ten of eleven sectors declined. Commodity stocks spearheaded losses following sharp falls in oil, iron ore and metals.

What moved the market

Today’s setback continued a losing run that has stripped more than 300 points or 4.25 per cent off the index since Friday. The ASX 200 touched levels last seen in January in the first half hour of trade.

“Today saw the ASX 200 fall over 1% for a third consecutive day – a run not seen since June 2020,” City Index senior market analyst Matt Simpson said.  

“In this instance we saw a failed break below 7,000 before prices closed back above it. In fact, around half ot the day’s range accounts for the rebound back above 7,000 – and that smells like a stop run to me.”

A “stop run” is where some market participants drive the price of an asset to a level where other investors are likely to have stop losses. In this instance, some traders were likely to have set stops just below the index’s February/March lows.

“Unless we see downside momentum accelerate on Wall Street tonight, we fancy the odds that prices will begin to try and stabilise above 7,000 tomorrow before it embarks upon its next directional move. As this is this usually the case following a large move and supposed stop run,” Simpson added. 

The market’s steep early losses followed a brutal start to the week on Wall Street after Chinese authorities tightened Covid restrictions over the weekend, exacerbating fears of a global slowdown. The S&P 500 slumped 3.2 per cent to a level last seen in March 2021. The Nasdaq Composite lost a chunky 4.29 per cent.

“The bears are in control,” Adam Sarhan, founder and CEO of 50 Park Investments, told CNBC. “An inability to rally… tells you everything that you need to know about the current state of the market,” he added.

The market rebounded as strengthening US futures encouraged swing traders to buy the dip. S&P 500 futures rallied 26 points or 0.65 per cent.

Winners’ circle

Polynovo bounced 15.59 per cent on signs the board saw value at current prices as its shares traded near three-year lows. Several directors added to holdings in recent sessions, according to notices lodged today. The medical device developer’s shares hit 85 cents last week after trading as high as $4.08 in late 2020.

Takeover target Pendal Group gained 8.11 per cent on news first-half profit improved 8 per cent to $96.7 million. Revenues increased by 31 per cent to $362.6 million.

A green light from regulators lifted Imugene 3.12 per cent. The immuno-oncology firm announced it had approval from the Human Research Ethics Committee for a Phase 2 trial of its immunotherapy candidate.

Clinuvel Pharmaceuticals edged up 3.3 per cent after securing approval to trial its drug for the treatment of vitiligo in the US.

News Corp bounced 4.74 per cent from a 14-month low. Fiber cement manufacturer James Hardie climbed 1.43 per cent.

Among the heavyweights, NAB swung to a gain of 0.32 per cent. Goodman bounced 0.31 per cent. Westpac added 0.2 per cent and CSL 0.09 per cent.

Doghouse

Until last Friday, the ASX had outperformed Wall Street as commodity markets benefitted from embargoes on Russia. Some of that support for the commodities-heavy ASX diminished this week as the sell-off in equities began to infect other markets.

“Commodities sank across the board as investors weighed up the darkening economic backdrop against ongoing supply side issues. Energy led the complex lower, while metals were also down sharply,” ANZ senior commodity strategist Daniel Hynes said.

Crude oil suffered its biggest setback since late March. Iron ore skidded 4.7 per cent. Copper, gold and other metals also declined.

Crude’s 5.7 per cent collapse dragged Woodside Petroleum down 2.56 per cent. Santos shed 1.73 per cent and Beach Energy 3.88 per cent.

Gold miner Newcrest skidded 3.61 per cent to an 11-week low. De Grey shed 3.72 per cent, Northern Star 3.64 per cent and Ramelius 3.35 per cent.

Other miners to feel the heat included Chalice -6.74 per cent, Paladin Energy -4.83 per cent and Alumina -4.3 per cent. Fortescue Metals shed 2.65 per cent, Rio Tinto 3.59 per cent and BHP 2.58 per cent.

Afterpay shareholders saw their investment trade near its lowest since the takeover by US giant Block. Block’s ASX listing sagged 8.53 per cent.  

AUB Group fell 9.91 per cent after raising $350 million from institutional investors.

Other markets

China’s Shanghai Composite was the pick of Asian markets, rising 1.02 per cent. The Asia Dow shed 1.27 per cent, Hong Kong’s Hang Seng 1.92 per cent and Japan’s Nikkei 0.31 per cent.

Oil added to last night’s loss. Brent crude declined US$1.19 or 1.1 per cent to US$104.75 a barrel.

Gold rallied US$4.70 or 0.25 per cent to US$1,863.30 an ounce.

The dollar bounced 0.28 per cent to 69.73 US cents from its lowest level since July 2020.

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