The Australian share market has given up all of its gains from Wednesday that sent it to an all-time high after Federal Reserve chairman Jerome Powell said a rate cut next month was unlikely.
The ASX200 on Thursday plunged 92.5 points, or 1.2 per cent, to finish at 7,588.2, a day after the benchmark index rallied 80.5 points to finally push through its previous 29-month-old record high.
The broader All Ordinaries closed down 94 points, or 1.19 per cent, to 7,818.8.
The losses also snapped the market's eight-day winning streak, its longest since a run in late March and early April 2023.
The losses came after the Federal Reserve overnight left interest rates on hold - as was widely expected - but with Mr Powell saying rate cuts would likely begin sometime this year but probably not as soon as March, as some traders had expected.
"Based on the meeting today, I would tell you that I don't think it's likely that the committee will reach a level of confidence by the time of the March meeting to identify March as the time to (cut), but that's to be seen," Mr Powell told reporters.
The market's implied odds for a March 20 rate cut fell to 47 per cent, from 40 per cent a day earlier, according to the CME FedWatch Tool.
IG market analyst Tony Sycamore said earnings misses from US big tech companies Microsoft, Alphabet and AMD also led to risk aversion.
The sell-off leaves Wednesday's push to all-time highs exposed as a possible false break high - a fate consigned to two-thirds of all breakouts, Mr Sycamore said.
Every sector finished in the red on Thursday, with financials the biggest loser, dropping 1.8 per cent.
Commonwealth Bank fell 2.9 per cent to $114.10, NAB dropped 2.2 per cent to $31.90, Westpac retreated 1.7 per cent to $23.77 and ANZ dipped 1.0 per cent to $26.92.
In the heavyweight mining sector, Fortescue fell 1.3 per cent to $29.50,Rio Tinto finished down 0.5 per cent to $132.29 and BHP dipped 0.3 per cent to $47.11.
Gold miners Northern Star and Newmont were a rare spot of green in the market, 1.7 and 1.3 per cent respectively.
Bapcor gained 1.2 per cent to $5.71 after the vehicle part provider said Noel Meehan would step down as chief executive next week and be replaced by former Total Tools CEO Paul Dumbrell.
Metcash was in a trading halt as the IGA supplier confirmed a media report it was in advanced discussions to acquire restaurant supplier Superior Food Group from Quadrant Private Equity.
The Australian dollar was buying 65.38 US cents, down from 65.75 US cents at Wednesday's ASX close.
ON THE ASX:
* The benchmark S&P/ASX200 index finished Thursday down 92.5 points, or 1.2 per cent, to 7,588.2.
* The broader All Ordinaries dropped 94 points, or 1.19 per cent, to 7,818.9.
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 65.37 US cents, from 65.75 US cents at Wednesday's ASX close
* 96.02 Japanese yen, from 97.46 yen
* 60.52 Euro cents, from 61.15 Euro cents
* 51.61 British pence, from 52.08 pence
* 107.03 NZ cents, from 107.75 NZ cents.
