THE Australian sharemarket dropped to a six-day low as Chinese data showed the country's manufacturing sector continuing to shrink and investors were disappointed with the outcome of the US Federal Reserve policy meeting overnight.
The benchmark S&P/ASX200 index was down 44.8 points, or 1.1 per cent, at 4087.6, while the broader All Ordinaries index was down 43.1 points, or 1 per cent, at 4133.7.
Gold was the worst-performing sector, falling 3.2 per cent. Energy fell 2.6 per cent, materials fell 1.9 per cent, financials fell 0.8 per cent and consumer discretionary fell 0.4 per cent.
A CommSec analyst, Juliette Saly, said investors had been hoping for new quantitative easing measures from the US Fed. Instead it got a continuation of its present bond-swapping, asset-purchasing program that aims to encourage borrowing and spending by reducing long-term interest rates.
Falls in the oil price affected the energy sector and a profit downgrade by the retailer Billabong helped cast a pall over that sector. "There was not a lot of positive news to really help investors out today and it looks like Wall Street might sell off again tonight," Ms Saly said.
Oil and gas company Santos led the falls, falling 4.4 per cent, or 5?, to $11.57. Woodside Petroleum fell 67?, or 2.05 per cent, to $32.08.
Media stocks were up slightly in a turbulent week for the sector that has involved restructures, mass redundancies and takeovers. News Corp rose 4? to $20.19, while its non-voting stock rose 10? to $20.
News is seeking to buy the 50 per cent of Consolidated Media Holdings that it does not already own. The takeover target rose 2? to $3.40. Shares in Fairfax Media, the publisher of The Sydney Morning Herald, were flat at 59?.
The struggling regional media publisher APN News & Media was down 2.5? at 71? after paying $36 million for an 82 per cent stake in the online retailer brandsExclusive.
Network Ten rose 1.9 per cent to 52.5?. A report from CLSA said the bid for pay TV assets from News Corp this week might make Ten seem more attractive.
In the resources sector, the global miner BHP Billiton fell 40? to $32.20, while its rival Rio Tinto fell 82? to $56.90.
Among the major banks, ANZ fell 17? to $21.58, National Australia Bank fell 31? to $23.14, Westpac fell 22? to $20.98 and Commonwealth Bank fell 31? to $51.78.
The surfwear retail company Billabong was in a trading halt as it launched a heavily discounted $225 million fund-raising from its shareholders. Its shares last traded at $1.83.
The toy distributor Funtastic was also in a trading halt after it said it intended to raise up to $24.6 million in order to reduce debt. Funtastic last traded at 16?.
The department store chain Myer fell 5 per cent to a record low of $1.69. The retailer JB Hi-Fi fell 1.8 per cent to $8.35.
National turnover was 1.93 billion shares worth $6.63 billion, with 362 stocks up, 619 down and 406 unchanged.
Drug company Acrux fell 14.5 per cent to $4.07 after it said the US patent examiner raised objections to claims related to Acrux's underarm administration patent application.