Close Australian shares fell more than 1 per cent today, erasing part of Monday's gains as investors shied away from risk and pushed down the big miners and banks on worries about a shaky global economic recovery.
At the close, the benchmark S&P/ASX200 index was down 48.5 points, or 1.1 per cent, at 4404.2, while the broader All Ordinaries Index dropped 44.3 points, or 1 per cent, to 4438.8.
Among the sectors, energy shares slumped 1.6 per cent, while financials and materials both shed 1.1 per cent. Gold shares bucked the trend, gaining 2.3 per cent.
For the month, the market dropped of 2 per cent after rising 4.5 per cent in July.
need2know:
- Japan shares plunge to 16-month low
- European shares sink 1.5% in early trading
- The dollar slips to 89.3 US cents
- Oil falls below $US74 amid profit-taking
- Gold hovers around $US1236
- Dow futures are 51 points lower at 9928
Analysts said the market was simply following Wall Street's direction and concerns about the fragile US economy, despite the relative strength of the Australian economy.
Stronger than expected retail sales and building data helped lift the market off its lows briefly, but retailers soon lost their gains.
"We are going to get a lot of sporadic spikes and falls because it is hard to get consistency through on the (economic) numbers," said Paterson Securities dealer Martin Angel. "Volumes are below normal, this apprehension about the (global) recovery has been around for a while now," he said, adding investors were waiting to see if there was a negative market reaction to the US payrolls report on Friday.
‘‘It has been a pretty weak day, although we are outperforming the US lead, which is one positive,’’ IG Markets research analyst Ben Potter said from Melbourne. ‘‘There is probably a bit of end of month fund-buying a little bit.
Wall Street fell about 1.5 per cent in the lightest volume of 2010 overnight as worries about the pace of economic recovery overshadowed data showing a rise in consumer spending and income.
Adding to today's jitters, Japan’s Nikkei-225 index plunged more than 3.5 per cent amid continuing worries over the strength of the yen.
‘‘With earnings season now over, attention now turns a bit more to Asian markets especially in the afternoon once the economic releases are out of the way,’’ he said. ‘‘When you see a big move lower in the Nikkei, you generally see the Australian market move in sympathy as well.’’
The big miners dragged the local market lower.
BHP Billiton closed down 82 cents, or 2.2 per cent, at $37.05, while Rio Tinto ended 92 cents lower at $70.09.
The major banks were also weaker, with Westpac the worst performer, down 63 cents, or 2.8 per cent, at $21.70.
ANZ closed down 36 cents, or 1.6 per cent, at $22.59, Commonwealth Bank was 25 cents lower, or 0.5 per cent, at $50.30, and National Australia Bank was down 35 cents, or 1.5 per cent, at $23.20.
Southern Cross shines
In company news, Southern Cross Media Group reported an $82.7 million annual loss and said it was cautiously optimistic about the current financial year. Shares in the media company were up 5.5 cents, or 3.1 per cent, at $1.825.
Fellow media companies were weaker, with News Corp down 11 cents at $15.64 and its non-voting stock down two cents at $13.87. Fairfax Media closed down 0.5 cents at $1.44.
The energy sector was weaker, with Santos down 23 cents at $14.20, while Woodside Petroleum was 58 cents lower at $41.87.
Gold miner Newcrest Mining closed up $1.24, or 3.4 per cent, at $37.25.
Abm Resources was the top traded stock by volume, with 74.14 million shares changing hands for $2.3 million.
Shares in the resources explorer closed up 0.2 cents, or 6.9 per cent, at 3.1 cents.
Preliminary national turnover reached 1.73 billion shares worth $5.87 billion, with 595 stocks down, 416 up, and 350 unchanged. There were about five companies down for every company up in the S&P/ASX50.
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AAP, Reuters, with BusinessDay