THE sharemarket lost ground after Europe's leaders failed to strike a crucial deal on a Greek bailout for the second week in a row.
Mining stocks were big drivers of the slide, with risk-averse traders selling off cyclical stocks that depend on economic growth.
Bellwether stocks BHP Billiton fell 22?, to $33.36, while Rio Tinto lost nearly 1 per cent, to $56.95.
Healthcare and retail stocks suffered some of the day's biggest losses, with the embarrassing failure of Click Frenzy's website compounding the sombre mood.
Overall, the benchmark S&P/ASX 200 Index fell 16.2 points, to 4369.5 points.
The sharemarket was directionless for much of the day.
But come mid-afternoon the mood turned sour after European authorities, including representatives from the International Monetary Fund and European Central Bank, failed to reach consensus on the best way to reduce Greece's debt burden, without which Athens cannot receive financial assistance.
The news drove the market to close down 16 points as the Dow futures dropped 44 points, and the S&P 500 futures dropped 0.6 per cent, pointing to losses at the start of trade on Wall Street.
The dollar lost ground against a broadly stronger US dollar, slipping to $US1.0352 from $US1.0384.
Westpac's global head of interest rates strategy and international markets, Russell Jones, said the shares slump was due to Australia importing bad news from Europe.
"The meeting of European finance ministers broke up without a meaningful deal of the Greek bailout coming through. I think the markets are expressing their disappointment with that," he said.
"For the moment at least, we're in a situation where all the international news is troubling. You've not just got Europe failing to address its problems, but you've got all the uncertainties around US budget position. Maybe what we need is for Mr [Reserve Bank chief Glenn] Stevens to cut rates in December."
Among local stocks, department store chain David Jones dipped 6.2 per cent, to $2.41 after first quarter profit inched higher, ending seven straight quarters of decline but missing forecasts.
Ord Minnett senior analyst Craig Turton said retail came under pressure after David Jones' sales data was weaker than expected. "I think there could be some overlay with Click Frenzy website breaking down overnight, because Myer's sales came in in line with expectations last week, but it has lost ground today, along with David Jones," he said.
Meanwhile, volatility continued for iron ore producer Fortescue Metals, with the stock falling 11?, or 2.7 per cent, to $3.90, making it the second worst performer among the top 50 ASX companies.
Frequently Asked Questions about this Article…
What caused the ASX sharemarket to slide in this report about the Greek bailout talks?
The market drifted lower after European leaders and institutions including the IMF and ECB failed to reach consensus on reducing Greece’s debt burden, which is needed for Athens to receive financial assistance. That international news soured sentiment mid-afternoon and prompted risk‑averse selling on the ASX.
Which sectors were hit hardest when stocks fell after the failed Greek bailout deal?
Mining stocks were the biggest drivers of the slide, while healthcare and retail also suffered. The report highlights cyclical, growth‑dependent stocks being sold as traders sought safer positions amid the uncertainty.
How did major miners such as BHP, Rio Tinto and Fortescue perform during the sell‑off?
Bellwether BHP Billiton fell to about $33.36, Rio Tinto lost nearly 1% to $56.95, and Fortescue Metals continued to show volatility — closing around $3.90 after a notable drop, making it one of the weaker performers among the top ASX companies that day.
What happened to retail stocks like David Jones and Myer during the market downturn?
David Jones dipped about 6.2% to $2.41 after first‑quarter profit only inched higher and missed forecasts. Myer’s sales had been in line with expectations earlier, but retail sentiment weakened further—partly compounded by the Click Frenzy website failure mentioned in the report.
Did the Click Frenzy website failure affect investor sentiment and retail shares?
Yes. The report notes that the embarrassing failure of the Click Frenzy website compounded an already sombre mood for retail stocks, adding to pressure on names such as David Jones and contributing to weaker retail performance that day.
How did international markets and currency markets react to the news?
The story drove futures lower—Dow futures dropped about 44 points and S&P 500 futures were down roughly 0.6%, pointing to losses at the open on Wall Street. The Australian dollar slipped, moving to around US$1.0352 from US$1.0384, as global uncertainty increased.
What did market strategists say about why the ASX fell and possible policy responses?
Russell Jones, Westpac’s global head of interest rates strategy, said Australia was ‘importing bad news’ from Europe after finance ministers failed to reach a meaningful deal on the Greek bailout. He suggested the international uncertainty could increase calls for an RBA rate cut in December.
What are the key takeaways for everyday investors from this market update?
The update shows how quickly international political and economic news—like stalled Greek bailout talks—can affect the ASX and individual sectors. Everyday investors should note that cyclical stocks (mining, retail) can be especially volatile in these moments, company‑specific results and events matter, and futures/currency moves can signal broader market direction.
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