Close The Australian stock market ended the day lower, led by financial stocks, on renewed worries about the state of the world's banks.
The benchmark S&P/ASX200 index was down 1%, or 33.8 points,
at 3442.8, while the broader All Ordinaries index was lower by 0.9%, or 30.2 points, at 3394.8. The ASX200 had traded as much as 1.9% lower during the day.
In an important move announced after markets had closed, regulator ASIC said it would extend a ban on covered short-selling of financial securities until March 6, citing increased volatility in financial stocks overseas.
Asian markets were also lower in afternoon trading, with the Nikkei 225 down 1.5% at 7944.37 and the Hang Seng down 1.8% at 12,726.10.
The Australian dollar fell 0.46% to trade recently at 65.33 US cents. It was also buying 58.71 yen and 50.36 euro cents.
"The banking sector was hit pretty hard yesterday and today because of the run-off effects of what's happening in the UK,'' CMC Markets analyst David Taylor said.Investors already nervous about the state of US banks have been rattled by the Royal Bank of Scotland's forecast that its losses for 2008 could top $US41.3 billion ($61.6 billion) - the biggest yet for a British corporation.
Mr Taylor said Australian banks were more regulated and in better health than many offshore banks, yet there was nervousness in the market that Australian banks may feel some effect from the woes of their offshore counterparts.
BHP recovers
BHP Billiton was an early drag on the market, before recovering some of its losses to close 29 cents lower, or 1%, at $28.66, after the company said it would suspend the Ravensthorpe nickel mine, reduce production at its Mount Keith nickel mine and cut 6000 jobs.
Mr Taylor said that although the news from BHP Billiton was negative, analysts had been largely expecting the miner would have to make cuts."The mood of the market today has been dominated by the UK banks and lower base metal prices,'' Mr Taylor said.
Rio Tinto fell 74 cents, or 1.9%, to $37.25.
Elsewhere in the sector, Fortescue Metals reversed earlier losses to finish higher - up 7.5 cents, or 4.1%, at $1.90, as did BlueScope Steel, which finished the day up 4 cents, or 1.1%, at $3.52.
Energy stocks reversed early falls after crude oil jumped today to recently trade at $US41.20 a barrel.
Santos was up 21 cents, or 1.5%, at $14.21, while Woodside Petroleum was up 98 cents, or 2.9%, at $34.41.
Macarthur Coal was down 8 cents, 2.6%, at $3.00 and AGL Energy added 37 cents, or 2.6%, to $14.40.
Banks fall
The Commonwealth Bank lost 74 cents, or 2.8%, to $25.61, while ANZ Bank was down 53 cents, or 3.9%, at $13.17.
NAB was lower by 78 cents, or 4.2%, at $17.61 and Westpac fell 48 cents, or 3.1%, at $15.02.
The gold miners were higher, with gold recently trading at $US852.52 an ounce - a fall of 0.8%, or $US7.28.
Lihir Gold rose 19 cents, or 6.9%, to $2.93 and Newcrest added $2.51, or 8.2%, to $33.04.
Among retail stocks, Woolworths was down 1 cent at $25.79 but Wesfarmers was up 23 cents, or 1.4%, at $16.83.
David Jones, which this morning cut its profit growth and sales forecasts, was down 14 cents, or 5.36%, at $2.50, while Harvey Norman lost 10 cents, or 4.3%, to $2.20.
Shopping centre operator Westfield lost 46 cents, or 3.8%, to $11.77 and Lend Lease was up 10 cents, or 1.5%, at $6.85.
Centro up
Centro Retail Group added 0.1 of a cent, or 1.3%, to 7.7 cents, while Centro Property Group rose 0.1 of a cent, or 1%, to 9.5 cents.
Media stocks were lower, with News Corp falling 30 cents, or 2.4%, to $12.31 and Fairfax Media falling 9 cents, or 6.1%, to $1.39.
West Australian Newspapers lost 16 cents, or 3.5%, to $4.46 and Ten Network was down 2 cents, or 1.9%, at $1.04.
The telecoms sub-index ended the day up 1.7%, with Telstra adding 6 cents, or 1.7%, to $3.60 and SingTel, which owns Optus, rising 5 cents, or 2%, to $2.57.
The airlines were lower. Qantas was down 5 cents, or 2%, at $2.45 and Virgin Blue was unchanged at 35 cents.
The health sub-index was the best performer on the market, up 2.05%. Biotech company CSL added 96 cents, or 2.9%, to $33.65.
BusinessDay, with AAP
