Aust stocks recover from sharp losses up to noon

The Australian stock market pared losses at noon on a recovery in iron ore heavyweights, after tumbling more than one% in early trade on carnage in global markets overnight after the US Federal Reserve unveiled plans to wean markets off stimulus as early as September.

At 1205 AEST, the benchmark S&P/ASX200 index shed 0.48% to 4,735.4 points, while the broader All Ordinaries index declined 0.53% to 4,718.6 points.

The benchmark dropped to an intra-day low of 4683.3 points earlier in the session. 0

IG market analyst Stan Shamu said markets had been pricing in the possibility of the US Federal Reserve tapering for a while "but clearly the magnitude of the impact was underestimated".

"With most economists now of the opinion that the Fed will start tapering as early as September by $20 billion, the Bernanke put seems to be swiftly waning," he said.

"Investors were always going to have an adverse reaction after having enjoyed a free ride, particularly in US equities, over the past year.

"The bad news just simply compounded yesterday with China and Greece concerns adding to the fear factor."

In Australia, the market on Thursday suffered its worst loss in a day since February amid jitters over the US stimulus measures and weaker-than-expected Chinese manufacturing data.

The benchmark S&P/ASX200 index was down 103 points, or 2.12%, at 4,758.4 points, while the broader All Ordinaries index was down 97.9 points, or 2.02%, to 4,743.9 points.