The Wrap: ASX posts worst month since January as oil price jumps

Welcome to your five-minute recap of the trading day, and how the experts saw it.

The numbers: The ASX 200 dropped more than 1 per cent to 7211.1 points after rising oil prices highlighted recession fears across the globe and pushed the local share market into posting its worst monthly performance since January.

Every sector finished the day lower with tech, telco and banking stocks the worst performers. The finance sector dropped 2 per cent, with the Commonwealth Bank and ANZ both down more than 2 per cent.

The lifters: Beach Energy 5.2%, De Grey Mining 4.6%, Whitehaven Coal 3.5%

The laggards: Tyro Payments -6.6%, Suncorp -6.4%, Zip Co -6.1%

The Lowdown: With Wall St closed for the Memorial Day holiday on Monday, it was hotter-than-expected German inflation numbers that worried the market early and dragged investor focus back to rising interest rates potentially triggering a recession.

That sentiment was then bolstered by Brent Crude nearing $US123 a barrel, hitting a two-month-high, based on the improved China outlook and EU leaders edging closer to a ban that would halt the imports of most Russian oil.

“The Australian equity market with its greater exposure to financials and resources has to date remained relatively resilient amid the sell-off. Yet if history is a guide, we are likely in the early innings of a local bear market,” T. Rowe Price head of Australian equities, Randal Jenneke, said.

But it’s not all bad news, according to Jenneke. As mentioned previously, he expects Australia better positioned to weather a financial storm than its offshore.

There was some good news on Tuesday, China’s factories showing a slower pace of contraction – suggesting that the worst of the current economic fallout may be coming to an end as the country starts to ease up on its tough lockdowns and takes further steps to boost growth.