The sharemarket has dropped sharply following the US market’s worst fall since last June.
A brutal night on Wall Street left the S&P 500 down 2.28 per cent after weaker-than-expected US manufacturing data prompted investors to shy away from riskier assets.
It is the most dismal start to a February on the US market since 1933, with the S&P off 5.5 per cent year-to-date, an IG market report said.
The Dow Jones Industrial Average was also off 2.08 per cent.
IG head of research Chris Weston said Wall Street’s plunge was the clear reason for the local market’s unravelling.
“If you look at the price action on the S&P, it fell modestly going into that and then it just collapsed. So, clearly, that was the trigger,” he said.
The market was unlikely to get any stimulus from the Reserve Bank of Australia’s interest rate decision at its first meeting of 2014 on Tuesday, he said, with the central bank widely expected to leave the cash rate on hold at 2.5 per cent.
All market sectors were feeling the pain, but resource stocks were leading the way.
BHP Billiton was down 56 cents, or 1.54 per cent, at $35.88, Rio Tinto had fallen 95 cents, or 1.45 per cent, to $64.39 and iron more major Fortescue Metals had shed nine cents, or 1.71 per cent, at $5.18.
But Australia’s biggest goldminer Newcrest Mining bucked the trend, rising 24 cents at $9.94.
The major banks also were lower, with Commonwealth Bank falling the most, down 98 cents to $73.42, National Australia Bank easing 60 cents to $32.60, Westpac dropping 52 cents to $30.47 and ANZ shedding 43 cents to $29.40.
Engineering group Downer EDI fell two cents to $4.84 despite its December half net profit of $99.1 million coming in modestly ahead of market expectations.
Real estate company REA Group, however, gained 77 cents to $42.47 after its profit increased 37 per cent due to growth in the Australian residential and commercial markets.
KEY FACTS
* At 1012 AEDT on Tuesday, the benchmark S&P/ASX200 index had lost 71.4 points, or 1.38 per cent, to 5,116.5 points.
* The broader All Ordinaries index had lost 70.6 points, or 1.36 per cent, at 5,131.3 points.
* The March share price index futures contract was down 80 points at 5,065 points, with 9,914 contracts traded.
* National turnover was 38.3 million securities worth $40 million.
