The Australian market has closed lower, dropping for a second straight day as ongoing worries from Europe hit financial stocks hardest.
National Australia Bank stock going ex-dividend also added to the declines on Thursday.
The benchmark S&P/ASX200 index closed down 17.9 points, or 0.44 per cent, at 4,076.3 points, while the broader All Ordinaries index ended 15 points, or 0.36 per cent weaker at 4,133.7 points.
On the ASX 24, the June share price index futures contract backpedalled 13 points to 4,073 points on volume of 40,617 contracts.
The market tumbled 1.4 per cent at the open and was down more than one per cent at noon, as investors took their cues from heavy losses on US and European bourses amid fresh worries over Europe’s debt crisis.
Concerns in Europe centred on fears Spain may need a financial bailout.
While there a partial recovery in the afternoon session, the Australian market finished well down amid broad-based declines.
“Fear has definitely got the market around its little finger today,” CMC Markets sales trader Ben Taylor said in a research note.
Financial stocks ended 1.14 per cent lower and were the worst performers on the market, according to IRESS data.
ANZ slipped seven cents to $20.90, CBA fell 34 cents to $49.40 and Westpac was 13 cents lower at $20.29.
NAB, which was trading without a dividend on Thursday, posted the biggest declines among stocks in the S&P/ASX50, dropping 5.63 per cent, or $1.34, to $22.48.
Mr Taylor said the financial sector’s declines came as Moody’s probed the strength of lenders’ mortgage insurance providers.
“Brokers are also moving negative on the banks considering the lower growth environment, potential for margin squeeze and the difficulty to foresee a change in economic conditions,” Mr Taylor said.
Market heavyweight BHP finished 20 cents lower at $31.97, while Rio backpedalled 49 cents to $56.86.
On a positive note, traditionally defensive stocks held up well – the healthcare sector gained 1.15 per cent, utilities rose 1.01 per cent and consumer staples advanced 0.73 per cent.
Making news, news reports said Telstra was considering buying television broadcaster Nine Entertainment Co.
Telstra closed down one cent at $3.55.
David Jones said total sales for the three months to April 28 fell 2.9 per cent, with the department store chain gearing up for a big end of financial year clearance.
The stock fell four cents at $2.21.
The spot price of gold in Sydney finished at $US1,560.05 per fine ounce, up $US11.525 from Wednesday’s local close of $US1,548.525 per ounce.
National turnover was 2.0 billion shares worth $6.0 billion, with 481 stocks up, 499 down and 394 unchanged.
