Close More than $24 billion was wiped off the market value of Australian stocks today, after offshore worries pushed the local bourse to its weakest level in four weeks.
The benchmark S&P/ASX200 index fell 76 points, or 1.6 per cent, to 4624.3, posting the largest one-day fall since October 12. The broader All Ordinaries index plunged 77.7 points, or 1.6 per cent, to 4705.1.
Among the major sub-indexes, gold stocks fell 3.1 per cent, energy dropped 2.8 per cent, materials lost 2.5 per cent, while financial lost 1.1 per cent.
The dollar fell sharply too and is now trading below 98 US cents for the first time since October. It recently bought 97.6 US cents.
need2know:
- Asian shares fall, but Nikkei recovers
- The dollar falls to 97.6 US cents
- Gold slips to $US1337 an ounce
- Oil edges up to $US82.67 a barrel
- Dow futures slump 189 points to 10,984
In an encouraging sign for global markets, Japan's Nikkei stock average erased earlier losses and ended up 0.2 per cent as investors took the yen's weakening against the US dollar as a cue to hunt for bargains in car makers and other exporters.
The Nikkei fell about 1 per cent at the open, but foreign investors such as European fund operators were detected buying Japanese blue-chip shares, providing support to the market, traders said.
Locally, there was no pick-up in sentiment. Market players sold off shares from the start in reaction to steep losses on offshore markets amid nervousness regarding Ireland’s financial position, and backpedalling commodities prices.
Market concerns that China would tighten its monetary policy to rein in inflation also weighed on the local market.
The result was a sea of red among the blue chips, with just one stock on the S&P/ASX20 closing in positive territory - CBA edged up 1 cent to $49.90.
Miners hit hard
Locally, there The miners were hit hard, with Rio Tinto the worst performer on the S&P/ASX20 slipping 3.2 per cent, or $2.75, to $83.69, as metals prices slid on fears that demand from China, the world's biggest metals consumer, would cool.
BHP Billiton ended down 2.2 per cent, or 98 cents, at $43.47, while Fortescue Metals finished 20 cents lower, or 2.95 per cent, at $6.58.
Commodity prices extended their sharp retreat, with copper and zinc falling by their daily limit of 5 per cent in Shanghai trading today. Three-month copper yesterday fell 5.7 per cent, or $US495, to $US8150 a tonne in London, its biggest slide in six months.
Woodside Petroleum ended 2.87 per cent, or $1.21 lower at $40.95 while Newcrest Mining closed down 2.68 per cent, or $1.10, at $40.00.
IG Markets market strategist Ben Potter said fears of aggressive action from the People’s Bank of China to control Chinese inflation had the most significance for the local market, given Australia’s leverage to commodities prices.
‘‘Last week’s PBOC tightening and more recent reports of food price control and cracking down on commodity speculation to curb inflation has triggered a massive plunge across the commodities spectrum,’’ Mr Potter said in a research note.
‘‘This, in turn, has seen material and energy names under heavy pressure as those who have enjoyed the strong recent performance run for the exit.’’
Other banks in the red
Although Commonwealth managed a small gain, the other three big retail banks closed more than 1 per cent weaker.
ANZ dipped 40 cents to $22.82, National Australia Bank was off 35 cents at $24.43 and Westpac shed 27 cents to $21.93.
Making news, taxi fare payment company Cabcharge said it was cautiously optimistic about the period ahead, given encouraging signs in the domestic economy. Cabcharge closed down 14 cents, or 2.4 per cent, at $5.70.
Macarthur Coal said first half profit may triple in 2010/11, from a year earlier, on the back of demand growth and a tightening market. The outlook helped lift the stock one cent higher to $11.41.
West Australian Newspapers’ first quarter results, released 25 minutes before the close of trade, showed net profit for the three months to September 30 rose 2.6 per cent from the prior corresponding period. The stock ended down 18 cents, or 2.49 per cent, at $7.05.
ACCC blocks Franklins takeover
Australia’s competition regulator said after the market closed on Wednesday it would oppose Metcash’s proposed takeover of Franklins supermarket business. Metcash finished the local session down 1 cent at $4.50.
The most traded stock by volume Mutiny Gold, with 89.2 million securities changing hands for $8.3 million. Mutiny, which published some drilling results on Wednesday, finished up 3.8 cents, or 52.78 per cent, at 11 cents.
Preliminary market turnover was 2.57 billion shares worth $5.98 billion, with 266 stocks up, 891 down and 328 unchanged.
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BusinessDay, with AAP, Reuters