Close Australian shares have fallen to their lowest level in over a month as investors sold out of equities in response to renewed economic concerns in the US.
At the close, the benchmark S&P/ASX200 index was down 61.2 points, or 1.4 per cent, at 4320.1, while the broader All Ordinaries index lost 61.8 points, or 1.4 per cent, to 4356.6.
All sectors were in the red, with materials down 1.3 per cent, financials losing 1.7 per cent and energy falling 2.4 per cent.
"Wall Street provided a negative lead on the back of disappointing housing numbers and it was enough to really spook our market," said CMC Markets institutional equities dealer Anthony Whitaker.
What you need to know
- The dollar recovers to 88.53 US cents
- Asian shares drop, with the Nikkei at a 16-month low
- European stocks slip at the open
- Gold rises above $US1231 an ounce
- Oil claws back to near $US72
- Dow futures are flat at 10,021
RBS Morgans private client adviser Bill Bishop said the impact of a sharp fall in sales of previously occupied homes in July in the US weighed on the minds of local investors.
‘‘The Australian market as usual is a slave to Wall Street,’’ Mr Bishop said. ‘‘They got a fright with the housing figures in America, and that upset the market mightily.
‘‘There’s a lot of talk about double dip recession, there’s a lot of talk about deflation ... and the market doesn’t like it.’’
Political uncertainties
Losses steepened in the afternoon after three of the four independent and green MPs who hold the balance of power following Saturday's inconclusive elections indicated they would back Labor's controversial mining tax.
Mining stocks had gained earlier in the week on bets that Labor was unlikely to get enough support to push it through.
"They're talking about another week or so until we get some sort of indication as to who is going to form a government and that will impact on the miners significantly," said Anthony Whitaker, an institutional equities dealer at CMC Markets.
The only stocks to post notable gains were those that reported profit results that beat market expectations.
Locally, earnings season continued, with reports out today from Seven, ROC Oil, Ausenco, OZ Minerals, Pacific Brands, Hastie Group, Super Cheap Auto, MAp Group, Asciano, WorleyParsons, Mortgage Choice and Suncorp. For all of this season's earnings, click here.
The Australian market as usual is a slave to Wall Street.
BHP's bumper profit
In resources, Rio Tinto lost $1.62 to $69.45 and BHP Billiton dropped 10 cents to $37.44 ahead of the release of its full year results, which came after the market closed. The miner more than doubled its full-year profit to $14.4 billion.
In the banking sector, National Australia Bank declined 42 cents to $22.77, Westpac dropped 37 cents to $21.06, ANZ lost 45 cents to $22.19 and Commonwealth Bank shed $1.15 to $48.30.
The only bright spot in financials was Suncorp-Metway, which posted a 19 cent rise to $7.97 after posting a $780 million annual net profit, more than double that of the previous year.
Airport owner MAp Group gained 11 cents, or 3.85 per cent, to $2.97 after it returned to half year profit and said air traffic growth would be strong in the short term.
Several healthcare stocks also outperformed, with Sonic Healthcare up 20 cents to $11.00 after a broker upgrade and CSL gaining 21 cents to $31.41.
WorsleyParsons punished
Investors punished WorleyParsons after it posted a 25 per cent fall in annual profit, despite being within the engineering group’s guidance.
Its shares lost $2.04, or 9.17 per cent, to $20.20. Among the day’s better performers was Pacific Brands, with a return to annual profit and a positive outlook pushing its shares up 11 cents, or 12.43 per cent, to 99.5 cents.
Lihir Gold stocks lost 5 cents to $4.40 and Newcrest shed 24 cents to $35.49.
The top-traded stock by volume was Focus Minerals, with 51.7 million shares worth $2.18 million changing hands. Shares in Focus lost 0.1 cent, or 2.3 per cent, to 4.2 cents.
Preliminary market turnover was 2.17 billion shares worth $6.3 billion, with 352 stocks up, 748 down and 328 unchanged.
- For market data by sector, click here
- For share price information, click here
- For the latest currency movements, click here
AAP, with BusinessDay