The Australian share market has finished lower, dragged down as nervous investors take their leads from falls across major Asian markets.
Despite small gains in early trade, Australian shares closed about 0.3 per cent lower as the Shanghai Composite, Japan’s Nikkei and Hong Kong’s Hang Seng indices moved into the red.
Shares in China were down 1.19 per cent when the local market closed.
CMC Markets sales trader Betty Lam said the Chinese markets had been “brought to their knees”.
China was facing a liquidity crisis, she said, with a need for the nation’s central bank to intervene to curb shadow banking, where non-banking financial bodies compete against commercial banks for traditional services.
She said China’s problems, combined with last week’s signalled windback of bond-buying in the United states, were still being felt across major markets.
“Adding further fuel to the Fed-fire last week, traders have sold the Chinese indices into bear territory; fears of a Chinese credit crunch have sent a ripple effect across Asian markets,” Ms Lam said.
“China’s story has placed downward pressure on the miners and energy based stocks today, both weighing down local equities heavily.
“Consumer staples are doing the heavy lifting for the Australian market as we see traders take flight from material-based stocks.”
BHP Billiton was down 54 cents at $30.81 and Rio Tinto lost $1.30 to $50.24.
Among the banks, ANZ was flat at $27.38, CBA gained 38 cents to $66.12, NAB added two cents to $28.70 and Westpac was 15 cents higher at $27.70.
Coles owner Wesfarmers added 57 cents to $38.60 and Woolworths gained 10 cents to $31.85.
Shares in food giant Goodman Fielder gained 3.5 cents, or 4.9 per cent, to 74.5 cents after it renegotiated its private label bread contract with Coles.
Gold miner Newcrest’s shares continued to fall, as it brought in a former chairman of the corporate regulator to review its disclosure practices.
Newcrest closed 23 cents lower, down 2.41 per cent, at $9.40.
KEY FACTS
* The benchmark S&P/ASX200 index dropped 13.1 points, or 0.28 per cent, to 4,656.
* The broader All Ordinaries index shed 17.6 points, or 0.38 per cent, to 4,633.5.
* The September share price index futures contract was eight points lower at 4,625, with 39,730 contracts traded.
* The spot price of gold in Sydney finished at $US1,282.38, up $US1.83 from Monday’s close at $US1,280.55.
* National turnover was 2.15 billion securities worth $5.8 billion.
