The Australian share market closed sharply lower on Tuesday as investors fretted over Standard & Poor's (S&P) downgrade on its outlook for US sovereign debt. Stocks fell across the board. At the close, the benchmark S&P/ASX200 index had fallen 68.6 points, or 1.41 per cent, to 4,793.3, while the broader All Ordinaries index had lost 71.1 points, or 1.44 per cent, at 4,874.3. On the ASX 24, the June share price index futures contract was 71 points lower at 4,796 points, with 37,625 contracts traded. The local bourse followed US and European markets downwards after S&P reduced its outlook on the US long-term credit rating from stable to negative and gave the US government until 2013 to act or face losing its coveted triple A rating.

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On the Australian market, oil and gas producer Woodside Petroleum fell 72 cents to $46.05. Woodside is battling to meet the start-up date for its Pluto liquefied natural gas (LNG) project after cyclone-related weather delays in Western Australia cut its March quarter production by 12 per cent. Gold miner Newcrest Mining descended 32 cents to $40.80 as it downgraded full year production guidance due to extreme wet weather on the east coast of Australian and political unrest in Africa's Ivory Coast. National carrier Qantas Airways was off one cent at $2.11 as it said it will charge a fuel surcharge on frequent flyer redemption seats, as part of another round of air fare increases driven by rising fuel prices.

Independent professional trustee The Trust Company lifted 10 cents to $6.50 after it posted a three per cent lift in annual profit but warned that the lack of non-recurring revenue in 2011/12 may constrain earnings. Global miner BHP Billiton retreated 82 cents to $46.67 and Rio Tinto dumped $1.90 to $82.10.

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In the banking sector, National Australia Bank shed 29 cents to $26.00, ANZ lost 33 cents at $23.40, Westpac declined 37 cents to $24.58 and Commonwealth Bank backtracked 52 cents to $52.01. Preliminary national turnover was 2.34 billion shares, worth $4.97 billion, with 921 stocks down, 249 stocks up and 334 unchanged. On Wall Street overnight, the Dow Jones Industrial Average index fell 140.24 points, or 1.14 per cent, to 12,201.59 points.

The Australian dollar sank in Asia trade Tuesday, weighed down by cautious board meeting minutes from the country's central bank. Bonds were lifted by the Reserve Bank of Australia's minutes, as well as a move by Standard & Poor's to cut its outlook on U.S. government debt. The decision by S&P was a boost for bond prices across the globe and weighed on equities throughout Asia.

More locally, much of the action focused on the late morning release of the RBA's April minutes, when the central bank held rates steady at 4.75%. The bank said it saw no case to change the official cash rate given the patchy nature of the economy and with above average costs of borrowing helping to contain inflation in the medium term. The Australian dollar was changing hands at $1.0459, from $1.0568 late Monday. Against the yen, it traded at 86.23, from 87.64.

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