Every sector was sold off, as the ASX200 dropped 1.4 per cent and the broader All Ordinaries did not fare much better, down 1.3 per cent.
The portents were not too bad. Wall Street was mixed overnight, but hardly worrying and futures trading pointed to a modest decline.
Regional exchanges were weaker, although not that bad. Japan and Hong Kong were down 0.6 per cent, while Shanghai ground out a 0.1 per cent gain.
The banks led the way down.
ANZ fell 2 per cent. The CBA was the best of the big four and still dropped 1.5 per cent, while Macquarie, which reaffirmed its solid $2.2 billion profit guidance yesterday, was hammered, tumbling 2.7 per cent.
The big miners were also sold off aggressively. BHP and Rio Tinto both fell around 1.3 per cent.
The exception to the rule was Fortescue, up 3.4 per cent after its quarterly production report showed another impressive effort at reining in costs.
Gold was no safe haven with Newcrest down 2.5 per cent and it was about the best in the sector.
Only 13 of the top 200 hundred companies made a gain.
- Financials -1.7pc
- Materials -1.4pc
- Consumer staples -0.9pc
- Industrials -1.1pc
- Health -2.1pc
- Energy -0.8pc
- Telecommunications -0.3pc
The impact of the stronger Australian dollar was acutely felt by the likes of CSL (-2.2 pc), Cochlear (-3.4pc) and Amcor (-2.2pc) although others with significant businesses in the US such as Boral (-0.4pc), Sims Metal (-0.5pc) and James Hardie (-0.8pc) did a little better.
The Australian dollar is still trading near two-year highs at 79.67 US cents.
“Australian investors have been in a collective state of indecision over the last two months,” Gary Huxtable from ASR Wealth Advisers said.
“Even though the local market has enjoyed a solid rise over the previous three sessions, it was continuously being sold off in late afternoon trading,” he said.
Despite the volatility, the key indices remain relatively range bound and every move towards the 5,800 level appears to trigger a bout of profit taking in a market lacking much conviction.
“Given the choppiness of our market, traders are also hesitant to hold exposure over the weekend of late, with four of the last five Fridays experiencing heavy sell-offs,” Mr Huxtable said.
“With the earnings season next week at the forefront of investors’ minds, many would be waiting for the first few results to come through before making major moves,” Huxtable said.
The reporting season kicks off next week with Rio Tinto being the focus of attention, with Suncorp, Seven West Media and Crown Resorts also posting results.
If there is a ray of sunshine, early futures trading points to a modest recovery on Monday, with the ASX/SPI 200 up 0.2 per cent to 5644.