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$100 billion sliced off stocks in a week

STOCKS plunged into a sea of red yesterday as fears of a US recession and the European debt crisis ravaged global equity markets.

STOCKS plunged into a sea of red yesterday as fears of a US recession and the European debt crisis ravaged global equity markets.

The fall wiped almost $60 billion from the value of shares and took the loss for the week to about

$100 billion.

Australian traders followed the overnight lead of the US, where the Dow Jones Industrial Average dived 512 points, or 4.3 per cent its biggest one-day drop in more than two years.

European markets were also

battered in early trading last night.

The S&P/ASX 200 Index finished down 171.1 points, or 4 per cent, at 4105.4, the biggest percentage fall since November 2008, at the height of the global financial crisis.

Platypus Asset Management chief investment officer Donald Williams said sovereign-debt problems in Europe and prolonged negotiations over the US debt ceiling had culminated in yesterday's selloff and would continue to weigh on the market.

"The drawn-out resolution in the US has affected sentiment," he said. "I don't think anyone truly believes the European issues went away just because Greece got a new debt package."

The energy sector was the poorest performer, losing 5.6 per cent, while the materials index fell 5.2 per cent. Woodside plummeted $1.95, or 5.3 per cent, to $34.55. Santos fell 82?, or 6.7 per cent, to $11.52 and Origin Energy dropped 43?, or 3.1 per cent, to $13.66.

Rio Tinto lost $4.58, or 6 per cent, to $72, a day after posting a record $7.3 billion half-year underlying net profit. BHP Billiton, finished down $1.94, or 4.8 per cent, at $38.12.

The financial sector dropped

3.9 per cent and the big four banks were all hit, ANZ losing 71? to $19.10, NAB 90? to $21.77, Westpac 50? at $19.27 and CBA $1.29 to $46.26. Macquarie Group dropped $1.80, or 7.2 per cent, to $23.25.

Gold, regarded as a haven during financial crises, closed down $US5.69 from Thursday's close at $US1657.61 an ounce. It was well up, however, from its overnight low of $US1640.40. Newcrest Mining fell $1.45, or 3.6 per cent, to $39.20.


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