Global woes weigh on share market

Published in the Herald Sun, October 2011

The Australian share market opened around 1.5 per cent lower after brutal sell-offs in overseas markets on Friday.

At 1011 AEST the benchmark S&P/ASX200 index was down 70.5 points, or 1.76 per cent, at 3,938.1, while the broader All Ordinaries index fell 67.7 points, or 1.66 per cent to 4,002.4.

World stock markets ended one of the most brutal quarters in years on Friday, with bourses in New York and Europe posting sell-offs to match the 2008 crisis and the bubble.

Wealth Within analyst Janine Cox said the local bourse was reacting to massive falls on Wall Street.

US stocks dropped more than two per cent on Friday as signs of slower growth spanning China, Europe and the United States, and the ongoing Greek debt crisis, hung darkly over the markets.

The Dow Jones Industrial Average closed down 240.66 points (2.16 per cent) at 10,913.38.

The S&P 500 dropped 28.98 (2.50 per cent) to 1131.42, and the tech-heavy Nasdaq fell 65.36 points (2.63 per cent) to 2415.40.

Ms Cox said there was a risk the market could fall even lower.

"We should soon be seeing a rise in the market. I was expecting that to happen in October but if the rise doesn't occur now, the risk is that even if we get a short rebound early 2012, it could be the low."

She expected local shares to recover some of their losses in intraday trading but to close lower on Monday.

Turnover was 146.74 million shares worth $327.17 million, with about nine out of every 10 stocks falling.

The weakest stock of the top 100 companies on the ASX was platinum group metals producer Aquarius Platinum, which plunged 7.4 per cent to $2.75.

The market saw broad-based losses, with the biggest local sectors registering the biggest falls in early trade.

Materials, which were the worst performers in the last quarter, fell 2.3 per cent, with mining giant Rio Tinto falling 2.5 per cent, or $1.55, to $60.25. Fellow miner BHP Billiton also fell 66 cents to $34.36.

Financial stocks also fell 2.1 per cent, with all the major retail banks shedding value. National Australia Bank fell the furthest, down 2.7 per cent to $21.77.

ANZ opened 2.5 per cent, or 50 cents down, to $19.02 as Australia's largest class action over its bank fees was set to go back in court on Monday.

Some 34,000 ANZ customers are taking action, claiming they were charged unfairly for late credit card payments and overdrawn accounts. 

On Friday, gold rose on lingering worries of a global economic slowdown, and the price of bullion notched its biggest quarterly gain of this year even after a sharp pullback from a record hit this month.

The spot price of gold in Sydney was $US1,625.45 per fine ounce, up $US1.75 from Friday's close of $US1,623.7.

The December share price futures index (SPI) fell 59 points at 3,941 points, with 11,505 contracts traded.  

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