The Australian share market ended the day deep in the red, dragged lower by the big miners, as global demand worries hit the prices of oil and base metals.

The benchmark S&P/ASX200 fell 52.3 points, or 1.4 per cent, at 3761.6, ending the week nearly 0.3 per cent lower, after gains at the beginning of the week were offset by losses over the past two days.

The broader All Ordinaries lost 49.3 points, or 1.3 per cent, to 3755.4.

On the Sydney Futures Exchange, the June share price index contract was 66 points lower at 3771 on a volume of  21,405 contracts.

Worries about the possibility of the US facing a lowering of its credit rating following a cut to the UK's outlook sent most of the region's bourses lower, bringing to an end a run of gains and leaving investors looking for something to lift their confidence.

Japanese share prices ended 0.4 per cent lower as losses on Wall Street and a stronger yen scared off buyers.

CommSec market analyst Juliette Saly said the fall in overseas markets overnight was due to Standard & Poor's downgrading its ratings outlook for the UK economy.

"We managed to outperform Wall Street in the past couple of sessions but today, not so much,'' Ms Saly said. "We're unfortunately seeing a sell-off across all sectors.''
 
She said energy stocks weighed on the market despite the higher oil price.

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"After the big gains from early March lows, shares have entered a period of correction and volatility,'' said Shane Oliver, head of investment strategy at AMP Capital Investors.

"We are still in recession and the aftershocks from the financial crisis will be felt for a while yet. Capital raisings, further bank losses and rising unemployment all have the potential to add to volatility in months ahead,'' he said.

Miners lead losses

The materials sector lead the overall decliners in the index today following a very ordinary performance for base metals in New York, with copper, zinc and nickel all dropping between 3-4 per cent. This pushed both BHP Billiton and Rio Tinto lower.

BHP Billiton shed 94 cents, or 2.7 per cent, to $33.46, while Rio Tinto sank $2.20, or 3.3 per cent, to $64.44.

Woodside plunged $1.99, or 4.5 per cent, to $42.41, as oil prices retreated from six-month highs. Santos lost 55 cents, or 3.7 per cent, to $14.18 and Oil Search inched 1 cent lower to $5.12.

National Australia Bank was the only major bank in the black, adding 11 cents to $21.76.
Westpac was down six cents to $19.38, Commonwealth Bank backtracked nine cents at $35.51 and ANZ dipped 22 cents to $15.41.

Coke bubbles up

Coca-Cola Amatil shares rose 11 cents to $8.60 after it said it expects to increase its profit in the first half of fiscal 2009 after a hotter summer boosted demand for beverages.

Virgin Blue inched 1 cent lower to 26 cents after it said its number of domestic and international customers increased in April compared with the same month last year.

Qantas was down 3.5 cents at $1.88.

Coles owner Wesfarmers has frozen the salaries of its senior management and board and reduced annual bonuses, and spoke out against the proposed crackdown on employee share schemes.

Shares in Wesfarmers were down 56 cents at $20.81.

Among other retailers, Woolworths dropped 30 cents to $25.83, Harvey Norman was four cents weaker at $2.96 and David Jones retreated 14 cents to $3.58.

Gold stocks shine

Investors flocked to safe-haven gold stocks.

Lihir put on 5 cents, or 1.6 per cent, to $3.20, Newcrest gained 13 cents to $31.95 and Newmont was up eight cents, or 1.4 per cent, at $5.89.

The spot price of gold in Sydney was $US950.35 per fine ounce, up $US7.30 on Thursday's local close of $US943.05.

Media stocks were mixed. News Corp shed 67 cents, or 5 per cent, to $12.83, its non-voting scrip was down 46 cents, or 3.9 per cent, at $11.24, Fairfax sank 5 cents, or 4.5 per cent, to $1.055 and Consolidated Media gained 6 cents, or 2.7 per cent, to $2.32.

Paperlinx fell 3.7 percent to 54 cents, after Merrill Lynch lowered its recommendation to underperform from buy, saying deteriorating conditions in the company's key paper markets will weaken demand and no recovery is likely until  2011.

The top traded stock by volume was property investment firm GPT Group, with 131.48 million shares worth $63.82 million changing hands.

Its shares added 2 cents, or 4.3 per cent, to 49 cents.

Preliminary national turnover reached 1.67 billion shares, worth $3.56 billion, with 410 stocks up, 594 down and 293 unchanged.

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