ASX: Australian stocks drop more than 5% after global sell-off on inflation fears

theguardian.com:

Australian shares have joined a global retreat, dropping more than 5% at the opening, as investors fear central banks will lift interest rates more aggressively, slashing economic growth and companies’ profits.

The benchmark ASX200 share index of the top 200 companies lost just over 5.2% within the first quarter an hour of trading, or more than 360 points. A minor rebound pared the losses to about 4.8%. The Australian dollar also dropped below 70 US cents.

Australian markets were closed on Monday, sparing them some of the falls from international markets last Friday.

Those declines, though, continued on Monday, particularly in the US where the broad-based S&P500 share index slumped 3.9% and the tech-dominated Nasdaq index plunged 4.7%.

The three-day loss of 9% on the S&P500 sent that index below 20% from its January peak, sending it into so-called bear market territory.

Investors were spooked by inflation figures, particularly for US consumer prices. Last week the government reported that inflation had increased to an annual rate 8.6% in May, the most since December 1981, and more than the 8.3% markets had expected.

That news came before the meeting this Thursday morning (eastern Australian time) of the US Federal Reserve’s federal open markets committee that investors now expect will decide to lift its key interest rate by 0.75 percentage points to quell