The Australian share market ended the day deeply in the red at a two-month low as finance stocks lost the most ground amid widespread selling. The benchmark S&P/ASX200 index was down 89.2 points or 1.88 per cent at 4,643, while the broader All Ordinaries index was down 84.8 points or 1.76 per cent at 4,722.9. Both indices opened around one per cent lower on Monday. It was the biggest one day percentage fall since March 15, when the bourse lost 2.1 per cent and took the S&P/ASX200 index to a two month low last seen on March 21.

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On the ASX 24, the June share price index futures contract was off 91 points at 4648, with 33,765 contracts traded. Local shares got a weak lead from Wall Street where investors sold off stocks because of lower earnings forecasts from US companies. Concerns about European sovereign debt worsened after Fitch Ratings cut Greece's credit ratings by three notches to B-plus, and Standard & Poor's lowered Italy's credit rating outlook from stable to negative.

Bank stocks bore the brunt of the investor concerns, with three of the four major banks the worst performers in the S&P ASX20. National Australia Bank wiped off 75 cents, or 2.74 per cent, to $26.66, Westpac was down 68 cents, or 2.99 per cent, at $22.07 and ANZ lost 77 cents, or 3.38 per cent, to $22.02 Commonwealth Bank lost 75 cents or 1.44 per cent to $51.42. Among other financials, QBE Insurance was down 38 cents, or 2.1 per cent, at $17.69, Macquarie Group shed 69 cents, or 1.98 per cent, to $34.16 and AMP lost 10 cents, or 1.9 per cent, to $5.17. Resources stocks were also lower, with the largest falls among the major miners. BHP Billiton lost 76 cents, or 1.73 per cent, to $43.29 and Rio Tinto fell $1.21, or 1.51 per cent, to $78.99. Metals exposed stocks were some of the worst performers among the top 100 companies. Lynas Corporation was the worst performer among the top 100, down 14 cents, or 6.11 per cent, to $2.15, BlueScope Steel was down six cents, or 4.15 per cent, at $1.385 and Sims Metal Management was down 56 cents, or 3.2 per cent, at $16.92.

In news on Monday, Agribusiness Elders lowered its forecasts for full year underlying profit after posting a $14.6 million first half loss. Its shares lost 4.5 cents, or 9.09 per cent, to 45 cents. The top traded stock was Republic Gold, with 227.37 million shares changing hands for $1.37 million. Its shares were up 0.1 of a cent to 0.5 cents, after the company released results of drilling at its Amayapampa project in Bolivia. Preliminary national turnover was 2.32 billion shares worth $4.75 billion, with 298 stocks up, 831 down and 370 unchanged.

The Australian dollar plummeted in Asian trade Monday, damped by sweeping concern about ongoing debt issues in Europe and a weak reading of China's manufacturing industry. Australian bonds were lifted by the developments, particularly on the short end of the curve. Riskier currencies including the Australian dollar were sold steadily throughout the session after Fitch's three notch downgrade of Greece's long-term foreign and local currency ratings, Standard & Poor's lowering of its outlook on Italy to negative Friday and historic losses by Spanish Prime Minister Jose Luis Rodriguez Zapatero's Socialist party in Spanish municipal and regional elections Sunday. Moreover, the HSBC Chinese purchasing Managers Index came in at a reading of 51.1, compared with 51.8 a month ago. The Australian dollar was changing hands at $1.0552, down from $1.0660 late Friday. Against the Japanese yen, the Australian dollar was at 86.515, down from
87.135.

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