Aust stocks 1.5% lower at noon

The Australian stock market extended losses at noon to sink 1.5% lower, with investors shrugging off a positive Wall Street lead in the face of growing fears over China's cash squeeze.

The Australian stock market extended losses at noon to sink 1.5% lower, with investors shrugging off a positive Wall Street lead in the face of growing fears over China's cash squeeze. 

At 1205 AEST, the benchmark S&P/ASX200 index fell 1.47% to 4,669.2 points, while the broader All Ordinaries index shed 1.49% to 4,653.3 points.

IG market analyst Evan Lucas said China's growing liquidity crisis hit analysts’ radars last week when the shibor rate (China’s libor rate) spiked through the roof, hitting the highest levels since 2003.

"This issue has been completely overlooked over the last few weeks as the build-up to Ben Bernanke’s speech reached fever-pitch and drowned everything else out," he said.

"If the ASX is going to find its feet again this year, cyclical stocks will need positive leads coming out of China."

He also said that given it was the last week of the financial year, investors would likely close out of loss-making positions is for tax purposes.

No major economic news is expected on Monday.

In equities news, Metcash released its full-year results, which showed a lift in net profit and revenue.

In Australia, the market on Friday suffered a second straight day of losses.

The benchmark S&P/ASX200 index was down 19.6 points, or 0.41%, at 4,738.8 points, while the broader All Ordinaries index was down 20.1 points, or 0.42%, to 4,723.8 points.