European debt crisis sparks local sell-off
THE local sharemarket fell more than 3.5 per cent yesterday on the worst trading day in a month.
THE local sharemarket fell more than 3.5 per cent yesterday on the worst trading day in a month.The bourse opened almost 3 per cent lower following weak offshore leads at the end of last week, as global investors feared Greece would default on its mounting debts.The market held losses in early trade, despite the Bureau of Statistics announcing the Australian economy had posted a trade surplus for the fifth straight month of $1.826 billion in July, as mining exports bolstered the balance sheet.The benchmark S&P/ASX 200 index closed down 156.2 points, or 3.72 per cent, at 4038.5. The broader All Ordinaries fell 152.3 points, or 3.56 per cent, to 4125.1.The last time the market dipped to this level was in August, when the leading index fell below 4000 for the first time in a year.CMC Markets analyst Ric Spooner said while European debts were well disclosed, making the situation clearer than during the global financial crisis, investors were still uncertain as to how it would play out."The lack of confidence among businesses, consumers and investors may have the effect of further weakening economic growth, which in turn feeds into greater credit risk," he said.The worst performing stock in the top 100 was Cochlear, which plunged 20.3 per cent, or $14.68, to $57.50, after it announced it would recall one of its hearing implant ranges. The implant manufacturer led a 5.1 per cent drop in the healthcare sector.Insurance company Suncorp also suffered heavy lossses, falling 5.7 per cent, or 47?, to $7.85.The finance sector fell 3.9 per cent, with losses across all the banks. Westpac led the declines, closing 4.6 per cent down at $19.20.The big miners fell on the back of lower offshore commodity prices, with BHP Billiton ending the day $1.46, or 3.9 per cent, down at $36.45. Fellow miner Rio Tinto closed $3.05 down at $68.20.Gold stocks were among the few winners on the day, with AngloGold Ashanti rising 6.38 per cent to $9.17. Australia's biggest goldminer, Newcrest, was the best performer in the top 20, slipping just 6? to $39.80.