Share market slips as iron ore price hits 10-year low

The local share market has edged slightly lower but is still around its highest levels for this month.

The All Ordinaries closed at 5,245, down 31 points, while the ASX-200 matched that at 5,193.

Most sectors ended the day in the red, including the banks.

The Commonwealth lost 64 cents to $79. The bank said it is going to pay out about $80 million in total to about 216,000 customers.

This is due to overpayments in fees and failure to honour interest rate discounts dating back to 2008.

The rest of the banking sector was a little lower as well, with the ANZ down 33 cents to $27.44.

Underlying all this was the iron ore price. It reached a 10-year low overnight of $US43.40.

More than a quarter of its value has been erased over the past six weeks.

Analysts now say the market is flooded, it has underestimated the decline in Chinese demand, and high cost producers may hit the wall.

Shares in Fortescue are down three cents to $2, Rio Tinto is 28 cents lower at $47.14. BHP is four cents lower at $19.76.

The latest official data shows construction work fell more than expected in the last quarter.

The value of construction work in Australia dropped 3.6 per cent, driven by a sharp decline in engineering work, for mining, which dropped 7.3 per cent.

Around 5:00pm (AEDT) the Australian dollar was up just a little, buying 72.7 US cents.

Spot gold is up slightly, at $US1,078, and West Texas crude oil was higher at $US40.61.

 

Source: ABC News

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