The Australian stock market, with its high valuation, is carrying high expectations. However, slightly weaker performance has led to violent selling.

During the busiest period of the August financial reporting season in Australia, investors have been selling off stocks of Australian companies that have failed to meet expectations. Woolworths, Australia's largest food retailer, and WiseTech Global are among the latest companies to experience sharp declines in their stock prices due to poor performance. Both companies saw double-digit drops in their stock prices on Wednesday, with Woolworths facing its biggest decline since 1997. Such significant volatility is a sign of the increasing expensiveness of the Australian stock market. The Australian S&P/ASX200 index is nearing historic highs, and price-to-earnings ratios are at their highest levels in four years. Companies are under immense pressure to demonstrate performance that justifies high premiums and ensures future growth. IG Australia market analyst Tony Sycamore stated, "This is the risk of overvaluations in the stock market during earnings seasons. If performance falls short of expectations, the market reaction can be very strong." Trading updates show that Woolworths' Australian food sales growth is lagging behind its competitor, Coles Group, leading to the drop in its stock price. Meanwhile, WiseTech, which has faced leadership issues this year, reported disappointing revenue figures. However, there have been some bright spots in the earnings season as well. Coles Group's supermarket sales growth exceeded expectations, leading to a historic high in their stock price. Tabcorp Holdings, a gambling company, reported profits that surpassed analyst expectations, causing their stock price to surge on Wednesday. With the Australian earnings season underway, market volatility following performance announcements may continue.