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Australian Market Sharply Lower, Plunges 3%

The Australian stock market is trading sharply lower on Tuesday, extending the losses in the previous two sessions, with the benchmark S&P/ASX 200 falling below the 7,400 mark, despite the positive cues from Wall Street overnight, as traders are selling off stocks amid fears of inflation and policy tightening by the US Federal Reserve.

The sell-off continued after annual domestic inflation figures came in higher than expected.

Concerns over the high domestic Covid-19 cases also dented market sentiment, though the daily new cases are on a steady decline. New South Wales reported 18,512 new cases and 29 deaths on Monday and Victoria also reported 14,836 new cases and 29 deaths. Queensland recorded 9,546 new cases and 11 deaths, ACT reported 904 new cases and one death as well as Tasmania reported 643 new cases and one death.

The benchmark S&P/ASX 200 Index is losing 213.60 points or 2.99 percent to 6,925.90, after hitting a low of 6,921.30 earlier. The broader All Ordinaries Index is down 226.80 points or 3.05 percent to 7,214.70. Australian stocks closed modestly lower on Monday.

Among the major miners, OZ Minerals is losing almost 2 percent, Rio Tinto is down almost 1 percent, BHP Group is edging down 0.4 percent, Mineral Resources is slipping more than 5 percent and Fortescue Metals is declining more than 2 percent.

Oil stocks are mostly lower. Woodside Petroleum and Origin Energy are losing more than 2 percent each, while Santos is declining 3.5 percent and Beach energy is slipping 5.5 percent.

Among the big four banks, National Australia Bank and ANZ Banking are losing more than 3 percent each, while Commonwealth Bank is declining almost 3 percent and Westpac is slipping almost 3 percent.

Among tech stocks, Xero is losing almost 3 percent, Appen is edging down 0.4 percent and WiseTech Global is declining almost 2 percent. Zip is edging up 0.3 percent after it said it is in talks with US-based Sezzle about a potential takeover.

Gold miners are lower. Resolute Mining is losing almost 5 percent, Gold Road Resources is plunging more than 7 percent, Northern Star Resources is down more than 3 percent, Evolution Mining declining almost 3 percent and Newcrest Mining is slipping almost 2 percent.

Shares in a2 Milk are surging more than 8 percent amid reports that Canadian diary giant Saputo could be in takeover talks.

Shares in Codan are jumping almost 17 percent after the technology maker announced that first-half profits are likely to rise by 21 percent.

Footwear seller Accent Group warned investors its first half earnings will be half what it reported last year due to the Omicron wave and weak Christmas sales. The stock is down more than 4 percent.

In economic news, consumer prices in Australia were up 3.5 percent on year in the fourth quarter of 2021, the Australian Bureau of Statistics or ABS said on Tuesday. That exceeded expectations for an increase of 3.2 percent and was up from 3.0 percent in the third quarter. On a quarterly basis, consumer prices rose 1.3 percent - again topping forecasts for 1.0 percent and up from 0.8 percent in the three months prior.

The ABS also said that the Reserve Bank of Australia's trimmed mean was up 1.0 percent on quarter and 2.6 percent on year, while the weighted median added 0.9 percent on quarter and 2.7 percent on year.

In the currency market, the Aussie dollar is trading at $0.716 on Tuesday.

On Wall Street, stocks showed a substantial turnaround over the course of the trading session on Monday, recovering strongly after another sell-off. The major averages all bounced well off their lows of the session and into positive territory.

The Dow was down more than 1,000 points at its worst levels but ended the day up by 99.13 points or 0.3 percent at 34,364.50. The blue chip index rebounded after hitting its lowest intraday level in over nine months.

The Nasdaq and the S&P 500 also showed significant rebounds after hitting multi-month lows. After plunging by as much as 4.9 percent, the Nasdaq climbed 86.21 points or 0.6 percent to 13,855.13, while the S&P 500 rose 12.19 points or 0.3 percent to 4,410.13 after dipping into correction territory.

Meanwhile, the major European markets all showed substantial moves to the downside on the day. While the U.K.'s FTSE 100 Index tumbled 2.6 percent, the French CAC 40 Index and the German DAX Index plunged 3.8 percent and 4 percent, respectively.

Crude oil prices plunged sharply Monday amid rising fears the Federal Reserve might resort to aggressive monetary tightening. A firm dollar also weighed on oil prices on rising tensions between Russia and the West over Ukraine. West Texas Intermediate Crude oil futures for March dropped $1.83 or 2.2 percent at $83.31 a barrel.

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