Market down after big falls on Wall Street
THE Australian sharemarket closed more than 2.6 per cent lower to its weakest close in more than two years, amid global uncertainty following big falls on Wall Street over a downgraded economic outlook.
THE Australian sharemarket closed more than 2.6 per cent lower to its weakest close in more than two years, amid global uncertainty following big falls on Wall Street over a downgraded economic outlook.Rio Tinto shares shed almost 7 per cent and BHP Billiton shares fell more than 4 per cent. At the close of trade yesterday, the benchmark S&P/ASX 200 Index was down 106.9 points, or 2.63 per cent, at 3964.9, its lowest close since July 2009.US stocks dived after the Federal Reserve announced mostly expected measures to support the US economy, but painted a grim economic picture. The Dow Jones Industrial Average plummeted 283.82 points, or 2.49 per cent, to close at 11,124.84. The broader S&P 500 dropped 35.33 points, or 2.94 per cent, to 1166.76, and the Nasdaq Composite shed 52.05 points, or 2.01 per cent, to 2538.19.Intersuisse adviser Andrew Sekely said investors pulled the Australian market lower. "It followed on from the heavy falls in the US and we've following suit. As long as news from overseas continues to be bad, it's unlikely that we'll see any recovery in local markets," he said. He predicts the domestic market will finish flat to weak. "But markets are so volatile it's impossible to say."At the close of trade, BHP Billiton was down $1.50 or 4.04 per cent, at $35.63, and Rio Tinto was down $4.49, or 6.45 per cent, at $65.10.Santos shares were down 37?, or 3.22 per cent, at $11.12, while Woodside shares were $1.15 lower, or 3.41 per cent, at $32.53.RBS Morgans client adviser Bill Bishop said volatility in America has translated into a weak day for stocks. "The lack of a cohesive policy in either Europe or America is driving this," he said.One of the only bright spots came from Foster's, which said on Wednesday night its board would recommend a SABMiller takeover offer to its shareholders. Foster's shares closed up 37?, or 7.57 per cent at $5.26, making it the highest traded stock by volume with almost 308 million shares traded.Treasury Wine Estate, spun out of Foster's Group earlier this year, was up 11?, or 3.24 per cent, at $3.51.Shares in OrotonGroup rose 6.9 per cent to $7.67 after the accessories retailer said annual profit had risen 8 per cent and sales so far this fiscal year had exceeded expectations.Market turnover reached 2.66 billion shares worth $7.08 billion, with 189 stocks up, 934 down and 323 steady.The price of gold in Sydney closed at $US1771.40 an ounce, down $US41.20 from $US1812.60 on Wednesday.