Australian shares reversed course today, losing almost all of yesterday's gains, hurt by a fall in resources stocks on global recession fears and by disappointing US company earnings that stoked worries about the outlook for profit growth.
The benchmark S&P/ASX 200 index closed down 146.4 points, or 3.4%, at 4156.1, its lowest point for the day, while the broader All Ordinaries lost 131.4 points, or 3.1%, to 4120.
All sectors of the market closed lower, with materials down 4.8%, financials down 3.3% and energy down 2.3%.
Man Financial broker Anthony Anderson said today's session was lacklustre on low volumes.
"It's been pretty ho-hum. There's not a lot of strength in it. The Aussie dollar was weaker overnight and the market likes to see strength in the dollar - it's almost a confidence thing,'' he said. "People are pretty much sidelined.''
The only bright spots to push into positive territory amid a sea of red were National Australia Bank and Rio Tinto.
After posting 2009 cash earnings of $3.9 billion yesterday, investors pushed shares in NAB 99 cents, or 4%, higher to $25.65.
"NAB is a bit of a relief rally I believe,'' Mr Anderson said, adding the result was "average'' but not the death knell some sectors of the market were fearing.
Other major banks were mixed, with ANZ firming 15 cents, or 0.8%, to $19.00 ahead of its fiscal 2008 results tomorrow.
Commonwealth Bank fell $1.30, or 3%, to $41.89, and Westpac lost $1.07, or 4.6%, to $22.05, while its takeover target St George Bank weakened $1.03, or 3.4%, to $29.60.
Shares in Rio Tinto surged by $4.04, or 5.4%, to $78.40.
"There's clearly a large buyer in the market,'' Mr Anderson said, adding that it was probably an offshore buyer and likely to be from China.
"I think people have caught on that it is trading at too much of a discount to BHP's bid and, although the European approval is still some time away, I think we've cleared the major hurdle with Australian regulatory approval,'' he said.
"BHP is clearly in the box seat now, being a very diversified and well regarded miner, whereas Rio is a little more exposed.''
Shares in BHP Billiton closed $2.06, or 7%, lower at $27.25, after the miner warned of slowing demand in China while delivering solid first-quarter production figures.
Westfield Group lost $1.59, or 9.1%, to $15.80.
Macquarie Group closed $1.32, or 3.8%, lower at $32.99.
The oil majors lost ground, pressured by the falling price for crude oil, with Woodside Petroleum down $1.67, or 3.9%, to $40.85, Santos losing 33 cents to $11.72, and Oil Search 37 cents, or 9.2%, lower to $3.66.
Local gold miners also suffered heavy falls, with Newcrest Mining 8.6%, or $1.93, lower at $20.44, Newmont Mining falling 18 cents, or 4.1%, to $4.22 and Lihir Gold shedding 9.8%, or 19.5 cents, to $1.80.
In company news, Macarthur Coal, the supplier of more than a third of the world's pulverised coal, said demand remains strong, after delivering a rise in output during the third quarter.
Macarthur Coal finished 9.9%, or 63 cents, stronger at $7.00.
Country Road posted a 22.4% jump in sales in the September quarter, but it expects the next six months to be much tougher. Shares were untraded at $3.54.
The Australian dollar also resumed its slide. It was down about 3 US cents, trading recently at 66.79 US cents and sagging to 66.67 yen.
BusinessDay with AAP
