The Australian share market closed more than one per cent lower after a top US central bank official raised the prospect of ongoing reductions in the US’s economic stimulus program.
Federal Reserve Bank of Atlanta president Dennis Lockhart’s suggestion that the US Federal Reserve could again taper its bond buying program caused anxiety among investors in markets around the globe.
OptionsXpress market analyst Ben Le Brun said several factors had spooked investors: a disappointing US jobs report last Friday, uncertainty about upcoming company earnings reports in the US, and the comments from Dennis Lockhart.
Furthermore, another profit downgrade from Australian engineering and mining services firm Forge had raised concerns that there may be some other skeletons in the closet ahead of Australia’s company earnings season, which kicks off in earnest in February.
“It was a horror day on the ASX (Australian Securities Exchange (on Tuesday),” Mr Le Brun said.
He said all sectors of the market had suffered losses.
Among the big banks, Commonwealth Bank fell $1.20 to $75.80, ANZ dropped 54 cents at $30.79, Westpac retreated 50 cents to $31.51, and National Australia Bank sagged 67 cents to $33.57.
In the resources sector, global miner BHP Billiton was off 42 cents at $36.14, and Rio Tinto dumped 16 cents at $63.35.
Gold miner Regis Resources fell 17 cents, or 5.54 per cent, to $2.90 after the company missed its quarterly production targets and flagged lower recovery rates at its Garden Well operation.
Mining, engineering and construction company Forge Group plummeted 22.5 cents, or 18 per cent, to $1.025 after it announced a $28 million profit downgrade.
KEY FACTS
* At 1619 AEDT on Tuesday, the benchmark S&P/ASX200 index was down 80.1 points, or 1.51 per cent, at 5,212.0 points.
* The broader All Ordinaries index was down 77 points, or 1.45 per cent, at 5,219.8 points.
* The March share price index futures contract was 86 points lower at 5,175 points, with 31,872 contracts traded.
* National turnover was 1.38 billion securities worth $3.59 billion.