The Australian share market closed firmly in the red after a fall in commodities prices and as it became apparent a full resolution to the European debt crisis was not imminent.
The benchmark S&P/ASX200 index was down 68.8 points, or 1.63 per cent, at 4,144.9 while the broader All Ordinaries index shed 68 points, or 1.59 per cent, to 4,206.8.
The December share price index futures contract was down 73 points at 4,145, with 36,228 contracts traded.
CMC Markets chief market strategist Michael McCarthy said investor sentiment was fragile and risk averse.
“Any bad news is magnified and positive news tends to be ignored,” Mr McCarthy said.
“We’re all concerned about the curse on our global village and we want to burn a witch.”
However, a market pullback was healthy given recent rallies on the Australian bourse.
“We don’t want to see markets go in a straight line because that’s just setting itself up for a reversal,” Mr McCarthy said.
The view on Europe’s debt crisis was tending back towards pessimism as it became clear the situation would not be resolved this weekend when European leaders hold a summit.
“Realistically, that’s not going to happen and at best what we’re going to see is some containment of the potential dangers to the financial system,” Mr McCarthy said.
“They’ll deal with the debt market situation but won’t be able, in a short time frame, to deal in an effective manner with the longer-term structural problems, that is, the budget deficits so many of those southern European nations are running.”
Mr McCarthy said investors would stay on the sidelines until the G20 meeting on November 3, when there should be some substantial news on the European crisis.
He said the mining and energy sectors were the worst performers on Thursday after a fall in commodity prices, particularly for oil and copper.
Among the major miners, Rio Tinto was down $2.23, or 3.43 per cent, at $62.85, BHP Billiton slipped 92 cents, or 2.53 per cent, to $35.48 and Fortescue backtracked 21 cents, or 4.65 per cent, to $4.31.
In the energy space, Woodside was down $1.46, or 4.16 per cent, at $33.60 while Santos eased 27 cents, or 2.19 per cent, to $12.07 after the company increased third quarter sales revenue by 27 per cent and maintained its full year production guidance.
Making headlines on Thursday, Newcrest reported a 16 per cent drop in gold production for the September quarter, higher cash costs and operational shu-downs at mines on Lihir Island in Papua New Guinea and in Indonesia.
Newcrest slumped $2.30, or 6.43 per cent, to $33.45.
The spot price of gold in Sydney closed at $US1614.79 per fine ounce, down $US45.08 from $US1,659.87 on Wednesday.
Packaging maker Amcor shares were up 10 cents, or 1.44 per cent, at $7.03. after it reported that it was seeking to accelerate growth by expanding its presence in emerging markets.
National turnover was below average, Mr McCarthy said, at 1.55 billion shares, worth $4.69 billion.
More than twice as many stocks fell for every one that rose.
