Small caps were hit hard in a day of market carnage on Thursday — and the outlook was shaky again on Friday morning.

Overnight US indexes again lost ground after a volatile trading session.

The Dow Jones and S&P 500 indexes each closed down by more than 2 per cent.

The tech-heavy Nasdaq “looked like it could confirm a correction” at one point, Reuters reported.

“Nasdaq was down as much as 10.3 per cent from its record high on August 29,” Reuters said. “If it closes at these levels, this would confirm a correction.” The Nasdaq recovered to be down 1.25 per cent for the session.

The ASX Small Ords index — a measure of small caps which has been trading at a seven-year high — took a hammering on Thursday. It dropped 3.25 per cent to a low of 2,682.

By comparison the large cap ASX200 index was down 2.7 per cent to 5883.

The ASX features about 1,700 small caps under $400 million market cap.

Of these, about 750 immediately plunged on Thursday morning while a similar number were unchanged as punters sold down or sat it out. Only about 120 small caps were ahead.

A major correction in the asset markets has been building for a while, reports Business Insider Australia.

“There have been 10 years of economic growth since the great financial crisis of 2008 and a bull market in stocks of pretty much the same length. That’s a long time in terms of economic cycles, and we were overdue for a “reversion to the mean,” as statisticians say.”

President Trump’s trade war, Chinese debt and excessive valuations of private companies — particularly tech plays — are among the factors causing the downturn, Business Insider reports.

Here are some of the ASX small caps hardest hit this morning:


AI virtual assistant Flamingo AI (ASX:FGO) fell 37 per cent to 2.2c after two key potential clients said they weren’t interested in continuing a paid trial.

AMP and Liberty Mutual Insurance have both ended paid trials of the AI virtual assistant and say they don’t want to buy the service.

For a time last year it was considered one of the hottest AI small caps on the ASX, with shares rising from a low of 2.5c in June to highs around 9c in November and January.

In July, Flamingo had ten potential customers in various stages of testing its technology.

Metgasco (ASX:MEL) fell 31 per cent to an intraday low of 5.2c after telling investors its drilling operations at a US well were unsuccessful.

The Weiss-Adler well has been deemed non-commercial and is being plugged and abandoned, the company said.

Final costs were expected to be materially lower than original estimates (US$7.5m vs. US$10.5m).

The well was drilled to a total depth of 17,766 feet MD and tested all objectives.

Alligator Energy (ASX:AGE) lost 25 per cent to fall back to a year-long low of 0.3c.

It told investors yesterday it had not found any “significant intercepts of uranium” at its TCC4 uranium prospect in the Northern Territory.

“While no immediate significant uranium has been identified based on scintillometer readings, we have covered only part of our target area,” chief Greg Hall said.

“It must be remembered that even drilling 100m away from the Ranger deposits would have found no anomalous uranium mineralisation.”

Stocks including Pancontinental Oil & Gas (ASX:PCL), Shareroot (ASX:SRO) and Castle Minerals (ASX:CDT) all had falls of more than 25 per cent despite a lack of news.

Here are the worst performing ASX small cap stocks at 4pm Thursday October 11: 

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ASX code Company Price change today (12.30pm) Price (12.30pm) Volume Market Cap
AJJ ASIAN AMERICAN M -0.42 0.07 11k 40.5M
RCP REDBANK COPPER L -0.4 0.015 53k 2.9M
VAR VARISCAN MINES L -0.33 0.002 199k 3.7M
SMI SANTANA MINERALS -0.33 0.004 100k 3.4M
FGO FLAMINGO AI -0.29 0.025 15M 39.2M
MEL METGASCO -0.27 0.055 567k 29.3M
AFA ASF GROUP -0.25 0.12 5k 108.4M
KEY KEY PETROLEUM LT -0.25 0.006 4M 10.8M
GGX GAS2GRID -0.25 0.003 825k 4.5M
EUR EUROPEAN LITHIUM -0.2 0.088 117k 60.1M
XST XSTATE RESOURCES -0.2 0.004 444k 3.9M
CGM COUGAR METALS NL -0.2 0.004 3M 4.8M
AYR ALLOY RESOURCES -0.2 0.004 15M 7.3M
HGM HIGH GRADE METAL -0.2 0.024 300k 13.6M
ISX ISIGNTHIS -0.19 0.11 492k 145.2M
TTL TRANSCENDENCE TE -0.18 0.018 1M 3.8M
CDT CASTLE MINERALS -0.18 0.009 3M 2.5M
WRR WORLD REACH LIMI -0.18 0.115 42k 7.4M
DGR DGR GLOBAL -0.18 0.115 356k 85.8M
DVL DORSAVI -0.18 0.07 69k 14.3M
RDG RESOURCE DEVELOP -0.17 0.019 681k 14.5M
VAL VALOR RESOURCES -0.17 0.005 201k 11.4M
SPX SPECTRUM METALS -0.17 0.005 501k 5.1M
AOA AUSMON RESOURCES -0.17 0.005 586k 3.1M
ALT ANALYTICA -0.17 0.005 863k 20.0M
BEE BROO -0.17 0.1 6k 74.2M
BYE BYRON ENERGY -0.16 0.285 2M 234.8M
TNR TORIAN RESOURCES -0.16 0.027 339k 7.1M
DSE DROPSUITE -0.15 0.11 1M 62.4M
ADX ADX ENERGY -0.15 0.011 2M 14.7M
ACB A-CAP RESOURCES -0.15 0.05 10k 51.4M
CVT COVATA -0.15 0.017 309k 15.3M
LON LONGTABLE GROUP -0.15 0.32 116k 46.0M
CPV CLEARVUE TECHNOL -0.15 0.41 239k 46.7M
PO3 PURIFLOH -0.15 0.47 1k 15.0M
LVH LIVEHIRE -0.15 0.47 115k 146.6M
FGR FIRST GRAPHENE L -0.14 0.12 839k 56.5M
ESE ESENSE-LAB -0.14 0.03 46k 2.8M
SI6 SIX SIGMA METALS -0.14 0.006 4M 3.2M
RMX RED MOUNTAIN MIN -0.14 0.006 8M 4.7M
PAK PACIFIC AMERICAN -0.14 0.042 50k 8.1M
MZN MARINDI METALS L -0.14 0.006 600k 12.5M
E2E EON NRG -0.14 0.006 200k 2.8M
CXZ CONNEXION MEDIA -0.14 0.006 370 5.9M
AHL AHALIFE HOLDINGS -0.14 0.012 100k 9.4M
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Drug maker Pharmaxis (ASX:PXS) was one stock to buck the trend, with news it had gotten another drug through a clinical trial.

The shares rose 7 per cent to 31c in early Thursday trade before finishing at 30c.

Pharmaxis says a phase one clinical trial for the first of its Lysyl Oxidase Like 2 (LOXL2) inhibitor compounds shows it’s safe for human use.

Here are the best performing ASX small cap stocks at 4pm Thursday October 11: 

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ASX code Company Price change Price (12.30pm) Volume Market Cap
LKO LAKES OIL NL 1 0.002 5M 30.3M
S3R SERPENTINE TECHN 0.5 0.003 1M 1.8M
ROG RED SKY ENERGY L 0.5 0.003 420k 2.1M
NWE NORWEST ENERGY 0.5 0.003 1M 8.5M
NIU NIUMINCO GROUP L 0.5 0.003 10M 6.8M
MOX MONAX MINING 0.5 0.003 2M 1.8M
MAR MALACHITE RES LT 0.33 0.004 125k 4.1M
MXC MGC PHARMACEUTIC 0.31 0.067 52M 61.9M
SUD SUDA PHARMACEUTI 0.25 0.005 850k 10.3M
EXO ENNOX GROUP 0.25 0.005 3M 7.1M
ENT ENTERPRISE METAL 0.25 0.02 309k 6.1M
RLC REEDY LAGOON 0.22 0.011 248k 3.6M
PPL PUREPROFILE 0.2 0.12 63k 12.0M
FFC FARMAFORCE 0.2 0.12 3k 12.8M
WRM WHITE ROCK MINER 0.17 0.007 7M 9.8M
LBL LASERBOND 0.17 0.21 389k 16.8M
UUV UUV 0.16 0.057 67k 7.6M
TNG TNG 0.14 0.12 966k 97.2M
THX THUNDELARRA 0.14 0.016 640k 8.9M
MKG MAKO GOLD 0.14 0.12 5k 6.6M
CZN CORAZON MINING L 0.14 0.008 835k 8.9M
CYQ CYCLIQ GROUP 0.14 0.008 155k 5.5M
CHK COHIBA MINERALS 0.14 0.008 100k 3.9M
FHS FREEHILL MINING 0.14 0.024 68k 8.5M
GOO GOOROO VENTURES 0.14 0.057 40k 4.3M
GAS STATE GAS 0.14 0.205 230k 24.3M
AGR AGUIA RESOURCES 0.13 0.17 176k 19.7M
TNT TESSERENT 0.13 0.069 204k 8.0M
CAP CARPENTARIA RESO 0.13 0.088 83k 16.7M
EM1 EMERGE GAMING LT 0.13 0.009 5M 4.7M
ENE ENEVIS 0.12 0.28 12k 16.2M
RES RESOURCE GENERAT 0.12 0.077 113k 40.1M
TNP TRIPLE ENERGY LT 0.11 0.03 84k 1.2M
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