Greece's debt woes again a drag on market

THE sharemarket was down on renewed concerns Greece was heading towards default and a weak lead from Wall Street, while lower commodity prices weighed on mining stocks.

By InvestSMART · 17 Feb 2012

By InvestSMART ·
17 Feb 2012

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THE sharemarket was down on renewed concerns Greece was heading towards default and a weak lead from Wall Street, while lower commodity prices weighed on mining stocks.

The benchmark S&P/ASX200 index closed 71.5 points, or 1.68 per cent, lower at 4181.9, while the broader All Ordinaries fell 70.2 points, or 1.62 per cent, to 4257.2. The March share price index futures contract was down 80 points at 4140.

IG Markets strategist Stan Shamu said investor sentiment turned negative after European Union officials remained reluctant to approve a second Greek bailout package worth ?130 billion ($159 billion).

Mr Shamu said there had been unconfirmed reports the second rescue deal could be pushed beyond March, with some suggesting there may be a bridging loan that would provide Greece with just enough funds to make a ?14.4 billion bond redemption on March 20.

Mining giant BHP Billiton fell 80?, or 2.22 per cent, to $35.30, Rio Tinto was down $1.59, or 2.31 per cent, at $67.28 and Fortescue Metals dropped 22?, or nearly 4 per cent, to $5.31.

The big four banks were all weaker, led by Westpac after it painted a bleak outlook for the economy and posted a weaker than expected $1.5 billion quarterly profit. Its shares shed 74?, or 3.53 per cent, to $20.22.

ANZ fell 50? to $21.20, National Australia Bank was down 42? at $22.63 and Commonwealth Bank retreated 38? to $49.85.

Qantas said it would cut routes, shed 500 jobs and defer aircraft orders after reporting a sharp decline in first half net profit. The shares jumped 9.5?, or 6 per cent, to $1.655 and was the best performing stock on the S&P/ASX 100 index.

The worst performer was breads and spreads maker Goodman Fielder, which reported a 77 per cent fall in first-half profit. The shares fell nearly 6 per cent to 48?.

Caltex has not ruled out shutting down its Australian oil refineries after writing down the value of its assets by $1.5 billion due to a high dollar and competition from Asia. Its shares eased 19? to $12.35.

Coles owner Wesfarmers reported a 0.3 per cent rise in first-half profit amid challenging short-term trading conditions. Wesfarmers shares dropped 76? to $29.09.

The spot gold price in Sydney was $US1720.80 an ounce, down $US6.65.

Preliminary market turnover was 2.02 billion shares traded worth $5.77 billion.

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Frequently Asked Questions about this Article…

Why did the Australian sharemarket fall today?

The article says the ASX fell amid renewed concerns Greece could head toward default, a weak lead from Wall Street and lower commodity prices that hit mining stocks. The S&P/ASX 200 closed 71.5 points lower at 4,181.9 and the All Ordinaries fell 70.2 points to 4,257.2.

How are Greece's debt worries affecting ASX futures and investor sentiment?

Investor sentiment turned negative after reports that EU officials were reluctant to approve a second Greek bailout worth €130 billion. The article notes unconfirmed reports the rescue deal might be pushed beyond March or a bridging loan could be used to meet a €14.4 billion bond redemption on March 20. March share price index futures were down about 80 points at 4,140.

Which mining stocks were hardest hit and by how much?

Lower commodity prices weighed on miners: BHP Billiton fell about 2.22% to $35.30, Rio Tinto was down $1.59 (around 2.31%) to $67.28, and Fortescue Metals dropped nearly 4% to $5.31, according to the article.

What happened to the big four banks and what drove their share movements?

All four major banks were weaker, led by Westpac after it flagged a bleak economic outlook and reported a weaker-than-expected quarterly profit of $1.5 billion. Westpac’s shares fell 3.53% to $20.22. The article also reports ANZ at $21.20, National Australia Bank at $22.63 and Commonwealth Bank at $49.85.

Which company announcements drove big stock moves today?

Several company-specific updates moved stocks: Qantas said it would cut routes, shed 500 jobs and defer aircraft orders after a sharp fall in half‑year net profit—its shares jumped about 6% to $1.655. Goodman Fielder reported a 77% fall in first‑half profit and its shares dropped nearly 6%. Caltex wrote down $1.5 billion of assets and hasn’t ruled out closing Australian refineries; its shares eased to $12.35. Wesfarmers (Coles owner) reported a 0.3% rise in first‑half profit and its shares retreated to $29.09.

What happened to the gold price and what does that mean for investors?

The spot gold price in Sydney was US$1,720.80 an ounce, down US$6.65 on the day. For investors following precious metals, the article shows gold moved slightly lower amid the market reaction to global events and sentiment.

How active was the market today in terms of turnover?

Preliminary market turnover was 2.02 billion shares traded, worth about $5.77 billion, according to the article.

What key takeaway should everyday investors note from this market update?

The article highlights that geopolitical events (like Greece’s debt negotiations), weak international leads and commodity price swings can quickly shift investor sentiment and move sectors differently—miners and banks were hit while some companies with cost-cutting or restructuring news (like Qantas) moved independently. Monitoring macro headlines and company‑specific announcements can help investors understand drivers behind market volatility.