Commodity falls take toll on mining stocks
THE sharemarket took another hit yesterday, with large falls in mining and energy stocks after commodity prices sagged overnight on rising fears of a global economic slowdown.
THE sharemarket took another hit yesterday, with large falls in mining and energy stocks after commodity prices sagged overnight on rising fears of a global economic slowdown.The S&P/ASX 200 Index gave up 50.7 points, or 1.2 per cent, to 4139.8. This took its loss since December 5 to 4.2 per cent.The market finished in the red for the third-straight day amid concerns about Europe's inability to deal with its liquidity and solvency problems, and as industrial production in the euro zone proved weaker than expected. Economists warned that Europe could be heading into recession.The dollar slipped to US98.78?, down from $US1.0016 on Wednesday. At close of trade, the euro was at $US1.2981, down from $US1.2983.News that business conditions in China had beaten expectations with the Chinese Manufacturing PMI index hitting a two-month high failed to outweigh concerns about Europe.The Australian dollar even lost ground against the euro, slipping to 76.06 euro cents from 76.87."The Australian dollar has been underperforming the euro in periods of high volatility throughout this crisis, and now that we've morphed into a concern about growth and European sovereigns it makes more sense," said National Australia Bank senior currency strategist Emma Lawson."The Aussie is a global growth currency. If the market is concerned that European growth is slowing, and since China exports a great deal to Europe and because Australia is reliant on China's growth, that's why it's weighing on the Aussie."BHP Billiton lost 73?(2.04 per cent) to $34.97, and Rio Tinto fell $1.81 (2.86 per cent) to $61.35 and Fortescue Metals was 15? lower(3.19 per cent) at $4.54.Among the materials, gold stocks were among the worst performers, with Newcrest Mining losing 93? (2.92 per cent) to $30.88.Energy stocks also fell, led by Woodside Petroleum, which slipped 53? (1.68 per cent) to $31.10.National Australia Bank closed down 38? (1.6 per cent) at $23.48, Westpac slipped 34? to $20.46, Commonwealth lost 75? to $48.63 and ANZ was down 19? at $20.78.In more gloom for the retail sector, JB Hi-Fi issued a profit downgrade after the market closed. It said in a note to the ASX it expected earnings before interest and tax for the latest half-year to be about 5 per cent below its first-half last year.Before the warning, the electronics and entertainment retailer had lost 24? (1.6 per cent), to $15.