After a dismal overnight session where US indices were all lower between 2.5% and 3% we had been calling the market to unwind about 1.9% lower around the 4370 mark, but losses weren't that severe with the market posting an intra-day low of 4382. For most of the session the index was in an arm wrestle with the 4400 level before eventually settling right on that level.

As had been expected based on US leads, losses for the day were broad based but were heaviest felt in the financials, materials and energy sectors.

The materials sector ended down 1.4% on continuing concerns a weakening Chinese economy would translate into falling demand for Australian resources.? This saw BHP Billiton and Rio Tinto weaker by 0.8% and 1.8% respectively while Fortescue Metals slumped 3.8%, courtesy of its concentrated leverage to China.?? Elsewhere in the sector, Bluescope Steel, Orica, Newcrest Mining and Lihir Gold were all lower between 0.5% and 3%.

The financial sector was again under heavy selling pressure today finishing lower by 0.8%.? Disappointing trading updates/forward outlooks from the NAB and CBA this week are clearly weighing on a sector the market had been looking to for leadership over the local reporting season.? ?Today all four of the major banks were weaker between 0.4% and 1% with Macquarie Group seeing even larger losses of more than 1.7%.

The biggest percentage loser on the session was the telecoms sector which slumped more than 8.6% after a disappointing earnings outlook from Telstra.? The company's shares ended down 9.5% after it delivered an in-line earnings result of $3.88b but disappointed with its 2011 outlook, suggesting revenues would be flat and EBITDA would be lower in the current financial year.?

Earlier in the session a surprising rise in the unemployment rate to 5.3% from 5.1% saw the market trade down near its lows of the day with the creation of 23,500 jobs not enough to offset an expanding participation rate.?