Offshore recession fears sparks slide
THE Australian sharemarket closed sharply lower on a mix of poor company results and big falls on US and European stock exchanges spooked by a dim global growth outlook.
THE Australian sharemarket closed sharply lower on a mix of poor company results and big falls on US and European stock exchanges spooked by a dim global growth outlook.The benchmark S&P/ASX200 index slumped 149.3 points, or 3.51 per cent, to 4101.9, while the broader All Ordinaries index was down 147.5 points, or 3.41 per cent, at 4171.9.The US and European market falls overnight followed the publication of a Morgan Stanley report that the US and Europe were on the brink of a second recession.The surfwear retailer Billabong fell $1.35, or 26.1 per cent, to $3.82 after posting an 18 per cent fall in full-year profit.The Wealth Within analyst Janine Cox said investors were on a knife-edge about the sovereign debt crisis gripping European governments and the US.Among the banks, ANZ was the worst performer, closing 92?, or 4.5 per cent, down at $19.50 despite its trading update which said underlying profit for the nine months to June 30 was up 16 per cent, and was optimistic about the economy.Westpac was 73?, or 3.6 per cent, weaker at $19.65, while National Australia Bank was 76?, or 3.3 per cent, lower at $22.40. Commonwealth Bank fell $1.36, or 2.9 per cent, to $45.96.QBE Insurance said the sharp fall in its share price was expected as investors overreacted to a big contraction in insurance margins but its underlying business remained strong. QBE was down 77?, or 5.6 per cent, at $12.98.The oil and gas producer Santos was 61? lower at $11.07 despite reporting a first-half profit almost double that of the prior corresponding period.The iron ore miner Fortescue Metals was down 30? at $5.75 after doubling its full-year profit.BHP Billiton fell $1.60 to $37.50 and Rio Tinto fell $3.92 to $69.42.ALL ORDS4171.9AUSTRALIA147.5 (3.4%)HIGH 4319.4LOW 4169.7AUG 19 SOURCE: BLOOMBERG