Chinese jitters prompt $21b wipe-out

The sharemarket finished sharply lower on Monday, after big losses on Chinese markets and as a range of stocks traded ex-dividend.

The sharemarket finished sharply lower on Monday, after big losses on Chinese markets and as a range of stocks traded ex-dividend.

The benchmark S&P/ASX 200 Index lost 75.6 points, or 1.5 per cent, to 5010.5, while the broader All Ordinaries fell 72.4 points, or 1.4 per cent, to 5028.5. In cash terms, about $21 billion was wiped off the sharemarket.

Stocks in China suffered heavy losses after the Chinese government said it would tighten lending regulations to curb the country's rising property prices, resulting in a selloff as investors feared a potential slowdown in the world's second-largest economy.

Locally, the materials sector, consumer staples and financial stocks all burdened the market, down 3.1 per cent, 1.5 per cent and 1.1 per cent respectively.

Patersons Securities strategist Tony Farnham said the market started the day on the back foot, after a decline in base metal prices and with a large number of major stocks trading ex-dividend, including the ASX's largest stock, BHP.

BHP finished down 2 per cent to $35.57, Rio Tinto lost 3.7 per cent to $63.65 and Fortescue Metals fell 3.5 per cent to $4.37. Several other stocks trading ex-dividend were also sluggish, Brambles slipped 2.6 per cent to $8.45, Toll Holdings dipped 2.2 per cent to $5.90 and AMP fell 1.6 per cent to $5.22.

Westpac led the losses among the big four banks, dropping 2.2 per cent to $30.36. Commonwealth Bank slipped 1.1 per cent to $67.12, NAB lost 1 per cent to $30.10 and ANZ fell 0.9 per cent to $28.36.

Shares weren't helped by a further weakening of Australia's construction industry as figures from the Australian Bureau of Statistics showed building approvals had fallen 2.4 per cent in January, following a 1.7 per cent fall in December.

Woolworths finished lower, down 2.2 per cent to $34.08, while rival Wesfarmers dropped 1.2 per cent to $41.09.

The local market has several events to keep an eye on this week, with the RBA's interest rate decision on Tuesday, gross domestic product figures out on Wednesday and employment numbers on Thursday.

Internationally, discussions over the US spending cuts and Italian election results will be watched.

Meanwhile, the dollar fell to its weakest point since July last year, coming in as low as US101.16ยข. It last fell below parity in June last year.

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