'Perfect storm' wipes 1.5% off key index

The key plank in the federal government's green crusade dominated trade, already weakened by poor overseas leads.

The new tax, coupled with soft US employment figures issued on Friday night and higher than expected inflation data from China, sent the S&P/ASX 200 Index down 72.4 points, or 1.56 per cent, to close at 4582.3.

Energy stocks were among the hardest hit, with the sector shedding 2 per cent.

But Goldman Sachs dealers Andrew Tanner and Ben Barzach said it was hard to find any winners as investors digested the

long-awaited details of the carbon tax.

"Steel stocks were the most visible sign that investors were not entirely happy with the industry outlook in a post-carbon tax world," the pair said in their afternoon note.

BlueScope Steel led the decline, finishing down 9?, or 6.7 per cent, at $1.26, while OneSteel fell 10?, or 4.9 per cent, to $1.93.

Airlines also had a tough time. Qantas tumbled 6.5?, or 3.3 per cent, to $1.935, giving back some of the gains from last week's grounding of Tiger Airways.

The Flying Kangaroo said the proposed carbon plan would cost it $110-115 million in 2012-13 and result in ticket prices rising by about $3.50, depending on the length of the flight.

Global media giant News Corporation backpedalled sharply in response to the latest developments on the phone-hacking scandal at the News of the World.

News Corp's non-voting stock was the second-worst performer on the S&P/ASX 50 Index sandwiched between BlueScope and Qantas dropping 88?,

or 5.4 per cent, to $15.37. The voting stock slumped 85?, or 5 per cent, to $15.92.

The US economy added just 18,000 jobs in June, well below the market consensus of 105,000.

IG Markets strategist Ben Potter labelled yesterday's trade a "perfect storm".

"Everything was flying along before US jobs data stepped off a cliff on Friday," he said. "It just goes to show that markets are still very nervous and how one disappointing economic read can reverse sentiment on a dime."

Friday's bad news from the US on the jobs front extended gold's recent gains. At the close yesterday, the spot price was up $US15.25 at $US1546 an ounce. Gold's strength lifted Newcrest 23? by midday but the stock sagged with the rest of the market to close with a gain of 1? at $38.80.