Stocks slide after EU bailout deal falters
THE sharemarket lost ground after Europe's leaders failed to strike a crucial deal on a Greek bailout for the second week in a row.
22 Nov 2012 SYDNEY MORNING HERALD - GARETH HUTCHENS WITH AAP
THE sharemarket lost ground after Europe's leaders failed to strike a crucial deal on a Greek bailout for the second week in a row.Mining stocks were big drivers of the slide, with risk-averse traders selling off cyclical stocks that depend on economic growth.Bellwether stocks BHP Billiton fell 22?, to $33.36, while Rio Tinto lost nearly 1 per cent, to $56.95.Healthcare and retail stocks suffered some of the day's biggest losses, with the embarrassing failure of Click Frenzy's website compounding the sombre mood.Overall, the benchmark S&P/ASX 200 Index fell 16.2 points, to 4369.5 points.The sharemarket was directionless for much of the day.But come mid-afternoon the mood turned sour after European authorities, including representatives from the International Monetary Fund and European Central Bank, failed to reach consensus on the best way to reduce Greece's debt burden, without which Athens cannot receive financial assistance.The news drove the market to close down 16 points as the Dow futures dropped 44 points, and the S&P 500 futures dropped 0.6 per cent, pointing to losses at the start of trade on Wall Street.The dollar lost ground against a broadly stronger US dollar, slipping to $US1.0352 from $US1.0384.Westpac's global head of interest rates strategy and international markets, Russell Jones, said the shares slump was due to Australia importing bad news from Europe."The meeting of European finance ministers broke up without a meaningful deal of the Greek bailout coming through. I think the markets are expressing their disappointment with that," he said."For the moment at least, we're in a situation where all the international news is troubling. You've not just got Europe failing to address its problems, but you've got all the uncertainties around US budget position. Maybe what we need is for Mr [Reserve Bank chief Glenn] Stevens to cut rates in December."Among local stocks, department store chain David Jones dipped 6.2 per cent, to $2.41 after first quarter profit inched higher, ending seven straight quarters of decline but missing forecasts.Ord Minnett senior analyst Craig Turton said retail came under pressure after David Jones' sales data was weaker than expected. "I think there could be some overlay with Click Frenzy website breaking down overnight, because Myer's sales came in in line with expectations last week, but it has lost ground today, along with David Jones," he said.Meanwhile, volatility continued for iron ore producer Fortescue Metals, with the stock falling 11?, or 2.7 per cent, to $3.90, making it the second worst performer among the top 50 ASX companies.