Investors flee on eurozone worries
THE local stockmarket fell to its lowest point in four weeks as talk that Greece could reject the bailout that saved it from bankruptcy spooked investors.
THE local stockmarket fell to its lowest point in four weeks as talk that Greece could reject the bailout that saved it from bankruptcy spooked investors.The benchmark S&P/ASX200 index fell 39.2 points, or 0.9 per cent, to 4275.1, while the broader All Ordinaries fell 43.7 points, or 1 per cent, to 4332.2. Among the sectors, gold fell 4.9 per cent on the back of a sharp drop in the bullion price, materials fell 2 per cent, energy fell 2.2 per cent and financials fell 0.3 per cent. Telcos were the only sector to post a gain, rising 0.8 per cent.Fears gripping global markets also saw the dollar drop as low as $US1.0052, with traders saying the currency could drop below parity with the greenback over the next few days.Concern that political upheaval in France and Greece could reignite the eurozone's debt crisis has seen local stocks wiping out three weeks of gains in just four sessions."This Greece political uncertainty has the potential to derail the risk rally we have seen this year," said Stan Shamu, a strategist at IG Markets. He said Greece was "a country that is staring in the face of 24 per cent unemployment and 51 per cent youth unemployment". "We probably will continue to see this risk-aversion until there is some sort of conclusion to the Greek crisis, but it doesn't seem like it is something that will happen any time soon," he said.Mr Shamu also said the absence of an expected cut in company tax in the federal budget had been a point of interest on the market, but had not been a driver of sentiment.Gold producer Newcrest Mining fell 5.3 per cent to $23.80 after gold prices fell to a four-month low. Bullion this year has tended to trade in tandem with risk assets such as stocks and oil, while assets such as Australian government debt have become a safe-haven favourite.The yield on the 10-year federal government bond fell to another record low, reaching 3.36 per cent.BHP Billiton fell 1 per cent to $34.33 while Rio Tinto fell 1.7 per cent to $61.23, its lowest since December.Iluka Resources fell 8.3 per cent to $12.85 after it lowered zircon production from 500,000 tonnes to 430,000 tonnes for the year.The retail sector fell after announcing some management reshuffles. Billabong named its new chief executive as Launa Inman. She has spent seven years as the managing director of the discount department store Target, a division of Wesfarmers. Billabong shares fell 4.6 per cent to $2.29.David Jones fell 2.9 per cent to $2.31 after it shook up its head office management and flagged a one-off restructuring charge in the second half. Its rival retailer Myer fell 3.9 per cent to $2.25.Shares in Telstra rose 3? to $3.65 as investors chased its reliable dividend. Its rival Optus said it had added 80,000 customers in the three months to the end of March, according to its parent SingTel.Mirabela Nickel requested a trading halt after its shares fell 30 per cent, to their lowest since 2004. The company is expected to update the market early today.The major banks had mixed results, with ANZ rising 1? to $23.12, National Australia Bank falling 2? to $24.61, Westpac rising 1? to $22.84, and Commonwealth Bank down 42? to $51.66.Engineering firm Downer EDI rose 5? to $3.47 after it told investors its troubled Waratah Train project was back on track and would be delivered within cost and program.BlueScope Steel fell 1.5? to 37? after it completed a tender for the repurchase of $US300 million in private placement notes.Renewable energy company CBD Energy was steady at 4.5? as it secured $US25 million in financing to help it ramp up its plans to build solar projects in Europe.