Hopes for a relief rally as US stocks lead plunge
THE share market fell to its lowest point in almost a year yesterday as investors fretted over the weakening economy in the US.
THE share market fell to its lowest point in almost a year yesterday as investors fretted over the weakening economy in the US.The benchmark S&P/ASX200 index slumped 100.8 points, or 2.27 per cent, to 4332.8 points while the broader All Ordinaries index dropped 102 points, or 2.26 per cent, at 4408.3 points.US stocks fell heavily overnight as poor economic data overshadowed a congressional deal to raise the country's debt ceiling and avoid default. The benchmark Dow Jones Industrial Average fell 2.2 per cent.A research analyst with IG Markets, Ben Potter, said the local market had endured a "pretty ugly" day's trading."It's all on the back of disappointing stuff out of the US," he said."It seems the [US] debt issue has been forgotten about already and everyone's focusing on the terrible growth data [in the US]. We had GDP on Friday, manufacturing on Monday and [then] personal spending dropped for the first time in two years," Mr Potter said ."So everyone is seriously questioning whether the US economy is actually recovering at all and if it's headed for a double-dip recession."Mr Potter said disappointing Australian retail figures yesterday had affected the local currency but had had little effect on the share market.Retail spending fell 0.1 per cent in June, according to the Bureau of Statistics. Economists' forecasts had centred on a 0.4 per cent rise in retail sales in the month.Mr Potter said the outlook for markets was cloudy but, given that US markets had been down for eight days in row, it could be time for a relief rally.In resources, global miner BHP Billiton fell $1.42, or 3.42 per cent, to $40.15, while Rio Tinto dropped $2.45, or 3.06 per cent, to $77.60.Among the major banks, National Australia Bank slid 77? to $23.20, Westpac lost 27? to $20.10, ANZ fell 53? to $20.29 and the Commonwealth Bank dropped 87? to $48.55.Ramelius Resources rose 8? to $1.495 after it forecast a rise of more than four-fold in full-year, gross profit on the back of soaring production and gold prices. The price of gold in Sydney rose to $US1669.43 per fine ounce, up $US44.46 on Tuesday.Residential developer AV Jennings was steady at 45? after it posted a 34 per cent lift in annual profit but flagged a softening market.