The Australian share market closed at its lows for the day as investors shed financial stocks ahead of key stress test reports on European banks.
The benchmark S&P/ASX200 Index ended the day down 38 points, or 09 per cent, at 4374.7 points, while the broader All Ordinaries Index lost 33.9 points, or 0.8 per cent, to 4394.8 points.
On a sector-by-sector basis, financial shares sank 1.8 per cent while materials rose 0.1 per cent and energy stocks added 0.2 per cent.
What you need to know
- The Australian dollar was buying 87.7 US cents
- Asian shares retreat on Bernanke comments
- Spot gold eased to $US1183 an ounce
- Oil was hovering at $US76 a barrel
- Dow futures were off 2 points to 10056
CMC Markets senior dealer Matt Lewis said the financial sector was a standout in negative terms.
‘‘There’s persistent chatter in the market that offshore funds are really building up short positions in all the big four banks over concern about exposure to the Australian property sector,’’ he said.
There appeared to be a belief that the Australian property bubble would be the last bubble to burst.
‘‘But, overall, it’s another quiet day in the market. Too much and too many variables keeping people on the sidelines,’’ Mr Lewis said.
‘‘You’ve got the (federal) election, reporting season in the US, and we’re waiting for our (the Australian) reporting season.’’
European authorities are also scheduled to release so-called stress tests of the major banks in the region by the end of this week.
Banks tank
Among the major banks, National Australia Bank fell 44 cents to $23.76, Westpac sank 37 cents to $22.15, ANZ lost 39 cents to $22.10 and Commonwealth Bank gave up $1.23 to $49.92.
Elsewhere in the financial services sector, AXA Asia Pacific Holdings was 4 cents lower at $5.35 after chief executive Andrew Penn said growth in the wealth manager's Hong Kong operations was accelerating.
Among resource stocks, BHP Billiton firmed 13 cents to $38.88 and Rio Tinto picked up 43 cents at $68.23.
Petsec Energy was 0.5 cents higher at 18.5 cents as it said tighter regulations in the United States' Gulf of Mexico in the wake of the BP oil spill would cause delays to Petsec's oil and gas projects and push up costs.
Gas-focused Santos sagged 20 cents to $13.55 as it said its operations in the Cooper Basin in outback South Australia would continue to be affected by flooding, and the company reported a fall in June quarter production.
Copper and gold producer PanAust was steady at 53 cents as it said it was on track to meet guidance after strong second quarter production.
Newcrest, gold
Gold miner Newcrest Mining was off 39 cents at $32.92 after reporting production in fiscal 2010 was in line with market expectations.
The price of gold at 1629 AEST was $US1181.40 per fine ounce, down $US8.08 on Wednesday's close of $US1,189.48.
Among other stocks, beer and wine maker Foster's Group was five cents higher at $5.89 as it has blamed a light-fingered interloper for the publication of an internal earnings target on Thursday.
Receivables manager Collection House was steady at 75 cents as it raised its full-year dividend after posting a 21 per cent rise in full-year net profit.
The top-traded stock by volume and the biggest mover on the market was Rox Resources, with 113.7 million shares worth $4.36 million changing hands.
Rox shares were up 2.3 cents, or 135.29 per cent, at four cents.
Rox announced on Wednesday a deal by which a Rio Tinto subsidiary, North Mining, became its largest shareholder, in return for abandoning an obligation to pay North a cash payment from its Myrtle zinc deposit in the Northern Territory.
Preliminary market turnover was 1.96 billion shares worth $4.21 billion, with 581 stocks down, 395 up and 350 unchanged.
On the Sydney Futures Exchange, the September share price index futures contract was 51 points lower at 4,347 points, with 24,434 contracts traded.
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AAP, with BusinessDay