Stocks slide on rating agency warnings
AUSTRALIAN stocks slumped in line with sharemarkets across Asia yesterday as warnings by two ratings agencies erased optimism that Europe's debt crisis might be nearing a resolution.
AUSTRALIAN stocks slumped in line with sharemarkets across Asia yesterday as warnings by two ratings agencies erased optimism that Europe's debt crisis might be nearing a resolution.The S&P/ASX 200 Index ended down 59.4 points, or 1.4 per cent, at 4193.4, more than erasing Monday's strong gains.Moody's Investors Service said it would review the credit ratings of all European nations after the Brussels summit's failure to deliver "decisive policy measures".Fitch Ratings said that, despite the measures agreed to last week, Europe was unlikely to avoid a "significant economic downturn".IG Markets strategist Stan Shamu said: "The onslaught on risk assets [on Monday] night really reflects how unimpressed investors were by the results from the European summit."It doesn't seem like the Santa Claus rally everyone was hoping for will arrive any time soon."National Australia Bank's monthly business survey found that although domestic business confidence was unchanged at plus 2 index points last month, investors were deeply concerned about the effect of Europe's deteriorating economy.Dealers are looking towards a slew of US and Chinese data this week particularly US monthly retail figures, due for release last night to determine further market direction.Resource stocks came under further pressure yesterday after the federal government downgraded its forecasts for export earnings for minerals and energy exports to $206 billion in 2011-12 from $215 billion previously.BHP Billiton was down 71?, or 1.9 per cent, at $35.82 while Rio Tinto slid $1.37, or 2.1 per cent, at $62.76.Continuing the recent trend, energy stocks were the worst performers, ending down 2.1 per cent. Woodside Petroleum lost 84?, or 2.6 per cent, to $31.53 and Santos dropped 21?, or 1.6 per cent, to $13.01.The banks were also lower, with NAB down 61? at $23.75, Westpac down 46? at $20.83, Commonwealth down 48? at $49.35 and ANZ down 21? at $20.74.Market turnover was1.67 billion shares worth $4.15 billion, well below the recent average, with about three shares falling for every one that rose.Gold lost more ground, finishing the Australian session down $US38.87 at $US1652.63 an ounce, adding to Monday's $US18.75 fall. At the start of the month, gold had sales up to $US1763 an ounce.The dollar lost almost US1?, finishing in Australian trading at $US1.0083. AAP