Investors run for cover after Cyprus votes
The sharemarket lost more skin on Wednesday, for the third day in a row. It seemed investors could not shake concerns about Europe's financial system.
The benchmark S&P/ASX 200 Index lost 20.1 points to 4967.3, while the broader All Ordinaries lost 21.8 points to 4982.6.
Cyprus remained in the headlines, with the Cypriot parliament voting down a eurozone plan to force bank depositors to share the cost of a €10 billion bailout.
Jubilant crowds outside the Cypriot parliament applauded, but the predicament reminded global investors of the fragility of Europe's banking system.
BBY institutional dealer Anson Rosewall said the uncertainty was pushing investors back to safer assets. "What's been taking place in Europe has destabilised sentiment towards risk assets, and you are seeing that in the rotation back into safe haven assets like the US dollar and gold," he said.
But some analysts said events in the Mediterranean were not as bad as thought. Laurence Fink, chief executive of BlackRock, the world's largest asset manager, said Cyprus was not a big economic problem and Europe would come to a resolution.
"The standoff between Cyprus and eurozone policymakers reminds us of the frailty in Europe, whose economic problems will take a multi-year fix," Mr Fink told Bloomberg Television. There were hefty falls from the big miners in response to a bleak outlook for iron ore prices.
The big two - BHP and Rio - dropped more than 2 per cent on Wednesday after Goldman Sachs forecast iron ore prices would fall from this year's $US139 ($A134) a tonne to $US80 a tonne in 2015.
Goldman Sachs cut its estimate for iron ore prices on expectations that demand would moderate and steel production would slow in China, the world's largest buyer.
BHP and Rio, whose shares also trade in London, were the subject of several analyst downgrades overnight. BHP declined 93¢, or 2.7 per cent, to $33.62, while Rio slumped $1.18, or 2 per cent, to $57.48.
Among the other iron ore-focused miners, Fortescue Metals slipped 9¢, or 2.3 per cent, to $3.80, and Mount Gibson Iron dropped 3¢, or 5.2 per cent, to 55¢.
The dollar largely held its ground after Cyprus' rejection of a bank deposit levy. At close, the currency was trading at US103.79¢, down from US103.80¢ on Tuesday.