The Australian share market is in the midst of a horror run, with a massive $75 billion stripped from its value over the week, its worst weekly performance in three years.
On Friday, it closed in the red for its fifth session in a row.
Not all sectors were down, but given their size, the major banks weighed on the market.
“There continues to be a clear liquidation of financial stocks,” IG chief market strategist Chris Weston said.
“The market is treading very carefully at the moment, and if they (investors) are going to buy anything, it’s going to be very defensive earnings.
“There is concern that this market could go down further in the next couple of weeks.”
Mr Weston said the banks were falling as investors asked questions about the health of the Australian economy and whether there was a bubble in the housing market.
Investors were deserting the banks for more compelling yields in the fixed income market.
The banks also had been trading at significant premiums to their earnings.
Mr Weston said there was nothing structurally wrong with the banks, and they had been a great investment.
The question was at what level would value-hunting investors start buying bank shares again.
Among the major banks, the Commonwealth bank was down 25 cents at $80.29, ANZ lost 33 cents to $31.17, National Australia fell 47 cents to $31.85, and Westpac dropped 21 cents to $31.19.
In the resources sector, global miner BHP Billiton backtracked 19 cents to $27.90, Rio Tinto added 28 cents at $57.02, and Fortescue Metals firmed four cents to $2.32.
Telstra edged up one cent to $6.01.
Kitchen and bathroom products maker McPherson’s dived 18.5 cents, or 19.79 per cent, to 75 cents after it slashed its profit forecasts on Thursday night.
KEY FACTS
* On Friday, the benchmark S&P/ASX200 index was down 5.8 points, or 0.11 per cent, at 5,498.5 points.
* The broader All Ordinaries index was down 4.8 points, or 0.09 per cent, at 5,506.5 points.
* The June share price index futures contract was down one point at 5,507 points, with 32,867 contracts traded.
* The price of gold in Sydney at 1700 AEST was $US1,177.29 per fine ounce, down $US4.31 from $US1,181.60 on Thursday.
* National turnover was 1.9 billion securities worth $5.5 billion.
