Rattled investors fret over Europe, US
THE sharemarket has closed sharply lower after its biggest one-day fall in four months.
THE sharemarket has closed sharply lower after its biggest one-day fall in four months.Investors fretted over the continuing bailout of Greece and negotiations in the US to avoid the so-called "fiscal cliff" that threatens to derail the wider world economy.On Tuesday, the benchmark S&P/ASX 200 Index was down 68.2 points, or 1.53 per cent, at 4379.8. It was the biggest one-day fall on the S&P/ASX 200 since July 23 when the index fell 1.69 per cent.Stocks fell as European finance ministers delayed approval of the next instalment of a massive bailout loan for debt-ridden Greece.European finance ministers meeting in Brussels on Monday gave Greece until 2016 to reduce its deficit and restructure its economy but postponed approval of the next instalment of a bailout loan.The fiscal cliff in the US refers to government spending cuts and tax increases that are scheduled to start in the new year, unless a divided Congress and the White House can work out a compromise.OptionsXpress market analyst Ben Le Brun said the Australian sharemarket experienced selling across all sectors, with the sell-off gaining momentum during the session. Investors were waiting to see if there would be an interest rate cut in Australia in December, and recent bad corporate news locally added to an air of uncertainty.Among the big banks, ANZ was off 40? at $24.05, National Australia descended 53? to $23.11, Westpac dumped 55? at $24.80, and Commonwealth Bank fell 70? to $58.70.Global insurer QBE was 88? lower at $10.92 after several broker downgrades and speculation that a capital raising would be insufficient, Mr Le Brun said. QBE shares have fallen sharply after it on Monday downgraded earnings expectations in the wake of superstorm Sandy in the US.Among resource stocks, BHP Billiton was 55? lower at $33.75 as it was given until 2016 to go ahead with the expansion at the Olympic Dam mine in South Australia.Rio Tinto lost 97? to $57.67 as it said a planned strike at its Blair Athol coalmine over claims of unfair redundancy payments would have minimal impact.Seven West Media jumped 13?, to $1.29 after it told shareholders it expected to record lower first-half earnings in a difficult media market, and outlined cost-cutting targets. Incitec Pivot was 11? higher at $3.02 as it said it was taking steps to reduce the risk associated with its fertiliser business while continuing to focus on expanding its explosives business, especially in Asia.The price of gold in Sydney was $US1725.49 a fine ounce, down $US9.97 on Monday's closing price of $US1735.46. National turnover was 1.64 billion shares worth $4.66 billion, with 661 stocks down, 301 up and 360 unchanged.