Goldminers lead way down as commodities slump
THE sharemarket fell more than 1 per cent to a two-year low, pulled down by investors selling out of mining and energy companies after commodity prices slumped.
THE sharemarket fell more than 1 per cent to a two-year low, pulled down by investors selling out of mining and energy companies after commodity prices slumped.Goldminers led the tumble after the price of gold dropped by more than $US150 at the weekend.Shares began the day in positive territory after a TV interview of the German Chancellor, Angela Merkel, in which she renewed talks of a possible Greek bailout.But within a few hours the local bourse began shedding value, with both main indices dropping well below 4000 points to the lowest level since July 2009, when the market was emerging from the depths of the global financial crisis.The S&P/ASX200 index fell 39.3 points, or 1 per cent, to 3863.9, while the All Ordinaries index slumped 50.9 points, or 1.3 per cent, to 3927.6.Gold slumped late on Friday because of renewed strength in the US dollar and talk of hedge fund liquidation wrecking its safe-haven status. The spot price of gold in Sydney was $US1581.89 per fine ounce, down $US163.82 from Friday's close of $US1745.71.Australia's biggest goldminer Newcrest also tumbled $3.24, or 9 per cent, to $32.86, and was the worst performer among the top 50 companies.Rio Tinto shed 3.9 per cent, or $2.45, to $60.20 and BHP Billiton fell 60?, or 1.74 per cent, to $33.95.Rare earth explorer Lynas Corporation was the worst performing stock on the S&P/ASX 100, plummeting 17.1 per cent to 87.5?. The best performing stock on the same index was James Hardie Industries, which rose 5.52 per cent to $5.73.Energy stocks slipped after world oil prices slumped. Santos fell 45?, or 4.15 per cent, to $10.40 and Woodside Petroleumfell $1.57 to $29.80.About seven out of every 10 stocks fell. Typically defensive health care stocks outperformed, up 1.45 per cent. The medical diagnostic company Sonic Healthcare rose 2.6 per cent to $11.58.The financial sector recovered slightly from a sell-off last week to close 0.75 per cent up, after a significant rebound in European bank stocks on Friday. Westpac was the strongest performer, up 2.46 per cent at $19.19.Woolworths rose 20? to $24.77 after it reiterated its forecast of a 2 to 6 per cent increase in this year's net profit.