Australian stocks fell 1.5 per cent on Tuesday, as weakness among the nation’s major miners dragged the broader market lower on weaker Chinese manufacturing data and concerns about Europe.
There was a brief rally after the Reserve Bank of Australia (RBA) board announced an interest rate cut at 1430 AEDT, but the rally was not sustained and the market resumed its gradual drift lower.
The benchmark S&P/ASX200 index closed down 65.2 points, or 1.52 per cent, at 4,232.9, while the broader All Ordinaries index fell 63.3 points, or 1.45 per cent, to 4,297.2.
Local equities opened down about one per cent on the back of a weak offshore lead and extended losses through the morning, as market players absorbed the latest developments on the Eurozone debt crisis and reacted to a poor night on Wall Street.
A disappointing set of Chinese manufacturing data also had investors looking to sell rather than buy.
“Volumes are light because of Victoria’s Melbourne Cup horse race holiday, and the market is being weighed down by renewed concern over Europe,” IG Markets market strategist Stan Shamu said in a research note.
The biggest declines came in the metals and minerals sector, which backpedalled 2.48 per cent, while materials stocks slid 2.4 per cent, according to IRESS data, as commodities prices were broadly weaker in overnight offshore trading.
BHP Billiton ended down 2.72 per cent, or $1.03, at $36.77, while Rio Tinto fell 2.98 per cent, or $2.06, to $67.15.
BHP approved the development of the $US4.2 billion ($A4.00 billion) Caval Ridge Mine coal project in the northern Bowen Basin in central Queensland, in a joint venture with Mitsubishi Development.
Fortescue Metals fell eight cents, or 1.65 per cent, to $4.77.
CMC Markets sales trader Ben Taylor said the Chinese PMI report missed market expectations and had investors on the back foot.
Some 17 of the 20 stocks on the S&P/ASX20 finished in the red, with the worst performer QBE Insurance, which slid 3.46 per cent, or 51 cents, to $14.24.
Other insurers fared a little better – IAG lost two cents to $3.13, while Suncorp Group was down 11 cents, or 1.28 per cent, at $8.48.
Two of the four big retail banks – Westpac and CBA – moved quickly to match the RBA’s decision to take 25 basis points off the cash rate at its November board meeting.
All the major banks ended in the red – ANZ fell 32 cents, or 1.48 per cent, to $21.36, CBA closed down 57 cents, or 1.16 per cent, at $48.70, NAB was off 60 cents, or 2.33 per cent, at $25.10 and Westpac shed 38 cents to $21.94.
Qantas closed up 1.75 cents at $1.63, as normal operations returned following the airline’s decision to ground its fleet as part of an industrial dispute with union groups.
Rival Virgin Australia finished down half a cent at 37 cents.
At 1616 AEST, the spot price of gold in Sydney was $1,718.10 per fine ounce, up $6.80 from Monday’s local close of $US1,711.30.
National turnover was 1.28 billion securities worth $3.18 billion, with about 17 shares falling for every two that gained.
At 1621 AEDT, the December share price index futures contract was down 60 points at 4,224 points, on volume of 30,454 contracts traded.
