Market slides as China adds to European fears
THE local market closed sharply lower with resources stocks hit hard, amid renewed pessimism over Europe's ability to manage its debt crisis.
THE local market closed sharply lower with resources stocks hit hard, amid renewed pessimism over Europe's ability to manage its debt crisis.Concern about weaker Chinese growth figures also dragged the index down, helping to reverse Monday's strong gains.At the close, the benchmark S&P/ASX 200 index was down 88.5 points, or 2.07 per cent, at 4,186.9, and the All Ordinaries had shed 88.4 points, or 2.04 per cent, at 4,249.5.The losses were broad-based and made on light volumes, Stuart Smith, a senior client adviser at Bell Potter Securities, said.Markets across Asia followed European and US stock exchanges lower after Germany warned that a European Union summit this weekend might not produce a resolution to the euro zone debt crisis.The losses were extended after China reported third-quarter growth of 9.1 per cent - down from 9.5 per cent in the June quarter and its slowest quarterly growth in two years.A warning overnight from a New York hedge fund manager, Jim Chanos, that China was heading for a hard economic landing also weighed on markets.The notes of the Reserve Bank of Australia's October 4 board meeting, published yesterday, left the door open for interest rate cuts, but they failed to lift the mood of investors.Rio Tinto was among the stocks hardest hit yesterday, slumping $3.70, or 5.29 per cent, to $66.25, and BHP Billiton lost $1.25 or 3.32 per cent, at $36.40.Fortescue Metals dived 47?, or 9.2 per cent, to $4.64, and Woodside Petroleum slipped 39? to $34.98.Financials were also sold off, with Bendigo and Adelaide Bank, the only institution not to lose ground, finishing steady at $9.05.NAB led the major banks lower, closing down 52? at $24.23. Westpac lost 41? to $21.58, Commonwealth Bank fell 86? to $47.45, and ANZ was down 29? at $21.07.Telstra was one of the few bright spots on the market, gaining 2? to $3.13 after its shareholders approved the telco's deal with the federal government over the national broadband network.Qantas fell 8?, or 5.19 per cent, to $1.46 after it said it would ground another two aircraft and cancel a further 80 domestic flights over the next month, in response to continuing industrial action by its engineers.Market turnover was 1.69 billion shares worth $4.17 billion.