World Market Overview 8/9/2011
Panicked investors shaved about $17 billion off the Australian share market, sending it to a 25-month low on fears of a volatile Wall Street following the first downgrading of US sovereign debt by Standard & Poor's. Monday was the fifth consecutive trading session that the domestic bourse closed in the red and added to the $62 billion that was wiped from the value of the local market last week. The benchmark S&P/ASX200 index closed down 119.3 points, or 2.91 per cent, to below the psychologically significant 4,000-point mark at 3,986.1 points. The broader All Ordinaries index slumped 113 points, or 2.71 per cent, to 4,056.7 points. On the ASX 24, the September share price index futures contract was 111 points down at 3,939, with 87,832 contracts traded.
BHP Billiton was down $1.52, or 3.99 per cent, at $36.60 while fellow mining giant Rio Tinto was down $3.37, or 4.68 per cent, at $68.63. Coal and Allied shares soared after its largest shareholders, Rio Tinto and Japan's Mitsubishi Development, made non-binding proposal for the shares in the miner they did not already hold. Shares in Coal & Allied surged $25.20, or 27.69 per cent, to $116.20. Preliminary national turnover was 3.15 billion shares, worth $7.8 billion, with 196 shares up, 1,039 down and 313 steady. The gold price hit a fresh all-time high of $US1,704.30 an ounce in Hong Kong trade, as Asian stocks tumbled. Among gold producers, AngloGold Ashanti put on 27 cents, or 3.4 per cent, to $8.21 but Newcrest was 38 cents weaker at $38.82. Making headlines on Monday, JB Hi-Fi posted an almost eight per cent fall in net profit to $109.70 million and revealed plans to expand. JB Hi-Fi shares closed down 35 cents at $14.00. The most traded stock by volume was Voyager Resources after the Mongolia-focused explorer announced a major new copper discovery in the South Gobi region. Voyager shares finished up half a cent, or 10.2 per cent, at 5.4 cents after almost 125 million shares changed hands.
The Australian dollar fell victim to rising global market tensions Monday, sliding to its lowest levels since early April as investors took shelter after Standard and Poor's downgraded the U.S. Friday to AA+ from AAA. Confidence across Asia was hit hard with Australian shares falling 2.9% over the day, extending a 4% slide on Friday. Investors were focused on the opening of U.S. markets, with investors there yet to be given a chance to react to the ratings agency's move. Some ground was won back late in Asian trading for the Australian dollar on early signs from Europe that some optimism may be returning to markets. Italian and Spanish bonds spreads tightened rapidly after the European Central Bank hinted it would buy the debt to stop the euro-zone debt crisis spreading. The Australian dollar was at $1.0354, down from $1.0447 late Friday and off a 30-year high of $1.1080 in late July. Against the Japanese yen, the Australian dollar was at 80.685, down from 82.06.