08/10/2008 - 13:37

Investors wipe $56bn from local market

08/10/2008 - 13:37

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The Australian stock market has clocked up its second-worst trading day for the year, closing down 5 per cent to its lowest point in three-years as panic selling engulfs markets around the world due to growing fears about the global financial crisis.

The Australian stock market has clocked up its second-worst trading day for the year, closing down 5 per cent to its lowest point in three-years as panic selling engulfs markets around the world due to growing fears about the global financial crisis.

At the 1615 AEDT close, the domestic benchmark S&P/ASX200 index was 230.6 points, or 4.99 per cent, lower at 4388.1, while the broader All Ordinaries lost 228.1 points, or 4.96 per cent, to 4369.8.

At 1617 AEDT on the Sydney Futures Exchange, the December share price index contract was 318 points lower at 4370, on a volume of 45,334 contracts.

In January this year, the local share market plummeted just over 7 per cent.

The energy sector was the hardest hit today, with the index falling 7.06 per cent to 13,620.6 points while the metals and mining index fell 6.57 per cent to 3394.9 points.

The sell-off in the Australian market follows Wall Street's plunge yesterday, with the market slipping to a five-year low. The Dow Jones Industrial Average shed 5.11 per cent to 508.39 points while the tech-heavy Nasdaq plummeted 5.8 per cent to 1754.88 points.

Markets in Asia are not faring any better with trade suspended in Indonesia after the bench market index plunged 10 per cent. Yesterday, the country's central bank raised interest rates by 25 basis points.

In Hong Kong, the market was down 5.6 per cent at midday while in China, share prices fell 3.08 per cent by noon, led by financial companies.

In Singapore, shares ended the morning session down 5 per cent while the market in India fell nearly 4 per cent on opening.

The Japanese market took its cue plus more from Wall Street, with its share prices plunging almost 9 per cent, one of the biggest losses ever.

"The US lead wasn't positive but Asia is really accelerating the downwards move," MF Global senior broker Anthony Anderson said.

"Tokyo has been particularly weak all day and it is certainly weighing on this market.

"Looking forward, we have a good chance of worldwide lower interest rates, while the International Monetary Fund is meeting over the weekend in America, so there is some glimmer of hope on the horizon."

The Australian market opened almost 3.5 per cent lower after the weak lead from Wall Street.

Locally, the big miners were weaker, with BHP Billiton falling $1.80, or 5.68 per cent to $29.90, rival Rio Tinto shedding $6.65, or 7.58 per cent to $81.12 and Fortescue dropping 61 cents, or 14.42 per cent to $3.62.

The banking sector was weaker, with ANZ retreating $1.15 to $17.00, National Australia Bank falling $1.65 to $24.35 and Westpac giving up $1.60 to $21.67.

Commonwealth Bank of Australia today formally unveiled a $2.1 billion purchase for Bank of Western Australia (BankWest) and St Andrew's Australia from financially distressed UK parent, HBOS plc.

Shares in Commonwealth, Australia's biggest bank, remain in a trading halt and last traded at $45.15.

The media sector was weaker, with Consolidated Media Holdings dropping 10 cents to $2.15, News Corp falling 39 cents to $14.50, its non-voting shares losing 51 cents to $14.24 and Fairfax dipping 14 cents to $2.45.

The retailers were also weaker, with Woolworths giving up $1.15 to $27.60, Wesfarmers retreating $2.01, or 7.37 per cent, to $25.25, David Jones shedding 18 cents to $3.48 and Harvey Norman dropping 15 cents to $2.78.

The energy sector was lower,as the world price of crude fell below $US90 a barrel, with Woodside falling $2.85. or 6.06 per cent, to $44.20, Santos losing $1.44 to $15.31 and Oil Search shedding 28 cents to $4.45.

Nexus Energy dropped 32.5 cents, or 29.82 per cent, to 76.5 cents after Japanese group Mitsui terminated the purchase of part of the Crux liquids project in WA, casting doubt over its development timeline.

The spot price of gold was stronger and was trading at $US878.65 an ounce by 1625 AEDT, up $US14.85 on yesterday's local close of $US863.80 an ounce.

The gold miners were mixed, with Lihir adding one cent to $2.36, Newcrest falling $1.05 to $23.20 and Newmont dropping 29 cents to $4.50.

Telstra was the most traded stock by volume, with 34.91 million shares changing hands, collectively worth $149.54 million.

The telco closed 12 cents lower at $4.26.

Preliminary market turnover reached 1.23 billion, worth $4.08 billion, with 212 stocks up, 911 stocks down and 239 unchanged.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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