The Australian stock exchange is suffering its worst day in months, with a sea of red across the board, and small caps are enduring the same pain as their larger brethren.

At midday the ASX Small Ordinaries index (ASX:XSO) of Australia’s 101st to 300th biggest companies – those in the ASX300, but not the ASX100 – was down 2.4 per cent – only fractionally less than the 2.5 per cent decline for ASX20 index (ASX:XTL) of Australia’s 20 biggest companies.

“We’ve taken a hit,” said CommSec market analyst Steven Daghlian. “It’s a messy performance this week.”

It’s shaping up to be the ASX’s worst day since June 11, he said.

But it’s not surprising given that the S&P500 index in the US plunged three and a half per cent overnight, with tech-heavy NASDAQ crashing five per cent, Daghlian said.

There’s no single reason for the sell-off, Daghlian said. But tech companies have seen an astounding run-up this year, with Amazon (NASDAQ:AMZN) up 80 per cent.

“It was bound to happen eventually, that there would be a break in the improvements,” he said.

Gold miners were the only group of companies to show some gains, although even that was mixed.

The S&P/ASx200 tech index (ASX:XIJ) was the worst-performer, down 4.5 per cent.

Welcome to the ASX200, Zip Co

High-flying buy now, pay later company  Zip Co (ASX:Z1P) will be the highest-profile addition to the ASX200 at its quarterly rebalancing on September 21, along with Auckland International Airport (ASX:AIA), insurance company AUB Group (ASX:AUB), and gold miners Ramelius Resources (ASX:RMS) and Westgold Resources (ASX:WGX).

They’ll be replacing novated leasing company McMillan Shakespeare (ASX:MMS), coal miner New Hope Corp (ASX:NHC), outdoor advertising company Ooh!Media (ASX:OML), lithium miner Orocobre (ASX:ORE), and radio station group Southern Cross Media Group (ASX:SXL).

But Afterpay (ASX:APT) was snubbed for the ASX20, despite being Australia’s 16th most valuable company as of the market close on Thursday, worth a whopping $23.8 billion, just behind Newcrest Mining (ASX:NCM).

Supermarket giant Coles Group (ASX:COL) – Australia’s 17th most valuable company – and iron ore miner Fortescue Metals (ASX:FMG) were added instead, replacing Westfield owner Scentre Group (ASX:SCG) and insurance company Suncorp Group (ASX:SUN)

For the ASX300, the new additions are gold miners Alkane Resources (ASX:ALK), Capricorn Metals (ASX:CMM) and De Grey Mining (ASX:DEG); IT wholesaler Dicker Data (ASX:DDR); movie theatre owner Event Hospitality (ASX:EVT); plumbing supply company Reece Limited (ASX:REH) and online furniture seller Temple & Webster Group (ASX:TPW).

Departing are African energy company FAR Limited (ASX:FAR); marketing company Ive Group (ASX:IGL), aged care operators Japara Healthcare (ASX:JHC) and Regis Healthcare (ASX:REG); department store owner Myer Holdings (ASX:MYR); and fleet management SG Fleet Group (ASX:SGF).

On most days additions to the ASX200 might be expected to get a bump in their share price, as it means managers of passive index funds will be forced to add those companies. But not on a day like Friday.

Trading volume down

Separately, the ASX said that there were fewer trades in August, but for more money, compared to August 2019.

There were 32.7 million trades in August 2020, down 17 per cent from the 39.6 in August 2019, the ASX said.

But in dollar terms, there was an average of $6.2 billion in value traded each day in August 2020. That’s up 13 per cent from the $5.5 billion in August 2019.