Australian stock market drops 1.2 per cent after weak Chinese inflation figures

The horror start to the year has continued on the share market as worries about China rattle investors.

Last week, both Wall Street and the Australian market had their worst start to the year on record and the mood barely improved today after weak Chinese inflation figures prompted a soft open.

The People's Bank of China's decision to set the daily yuan exchange rate slightly higher did little to calm the jitters, sparking concerns the authorities have lost control of monetary policy.

After plunging more than 2 per cent, and hitting a two-and-a-half-year low, some late gains for technology and telecommunications shares helped limit the losses.

By the close at 5:00pm AEDT, the All Ordinaries index lost 1.2 per cent to close at 4,991.

The ASX 200 matched those falls to finish on 4,932.

Mining stocks were the worst hit, with BHP Billiton falling to an 11-year-low. It shed 4.9 per cent to close at $15.55.

Rio Tinto fared little better, down 3.3 per cent to $40.50.

Bank shares were also sold — ANZ fared the worst of the big four banks, down 1.5 per cent to $25.15.

iSelect shares tumble as company blames staff costs

Shares in the insurance comparison website iSelect tumbled by 39 per cent to 67 cents after it cut its full-year profit forecast by as much as 39 per cent.

iSelect blamed staffing costs, saying it kept staff numbers high during a slow time for the business.

The latest ANZ Job Advertisements Series shows job listings slipped by a tenth of 1 per cent in December.

That shows job ads increased by 10 per cent last year.

The flat result for December came after four-straight months of increases, and ANZ says it was likely due in part to the timing of the Christmas holiday.

The dollar is creeping higher after a weekend sell-off.

Just after 5:00pm AEDT it was buying $US69.6 cents. It was also fetching 63.8 euro cents, 81.7 Japanese yen and 48 British pence.

Spot gold was higher at $US1,106 an ounce while West Texas crude dropped to $US33.15 a barrel and Tapis crude was fetching $US34.47 a barrel.

Source: ABC News

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