ASX: Share carnage wipes more than $40 billion from market

The Australian share market has suffered its biggest one-day fall since September, shedding around $42 billion in value.

Key points

  • ASX 200 closed 2.9 per cent lower at 4,832
  • Market value fell by $42.5 billion
  • Banks led the slide - big four off between 4-5.2 per cent
  • Australian dollar holds at 70.4 US cents

The main ASX 200 index closed 2.9 per cent lower at 4,832, while the broader All Ordinaries index was 139 points down at 4,883.

Banks were the biggest losers on the market, with the financial sector index down 4.1 per cent.

The largest fall in the sector was for one of the smaller players, Bank of Queensland, which dropped 8.1 per cent to $11.66 on a warning that market volatility was increasing its funding costs and putting pressure on profit margins.

However, the big four also got walloped, with Westpac slumping 5.2 per cent, NAB 4.8 per cent, the Commonwealth Bank 4.6 per cent and ANZ 4 per cent.

Investment bank Macquarie was also down 4 per cent, amid a global rout for banking stocks.

Deutsche Bank shares closed around 8 per cent lower in Germany overnight, and CommSec market analyst Tom Piotrowski said that sell-off spread to other banks around Europe and in the US.

"Similarly on Wall Street, we saw pretty steep declines for leading financial names. Goldman Sachs shares had their biggest fall in six years," he told ABC News 24.

"There is something of a unifying theme throughout the markets around the world. That is why the domestic banks are under such pressure."

The major miners were no support to the broader market, with BHP Billiton sliding 2 per cent, Rio Tinto down 1.25 per cent, Fortescue off 1.6 per cent and South32 losing 4.2 per cent.

Analysis: What's spooking markets?

The danger with the current period of market volatility and share sell-offs is that there is no single cause, and there are a multitude of risks.

Energy stocks also bled value after West Texas crude oil dropped back below $US30 a barrel overnight.

Woodside fell 2.5 per cent, with Santos down twice that much to $3.06, Origin was off 3.8 per cent and Oil Search closed 2.3 per cent lower at $6.74.

However, the market's biggest winners also came from the resources sector - gold miners and explorers.

The price of the precious metal bounced to $US1,192 an ounce, pushing Newcrest 8.25 per cent higher to $16.80, Regis Resources was 12.3 per cent up, Northern Star 7.7 per cent ahead and Evolution rose 6.4 per cent.

The Australian dollar also managed to survive the equities carnage largely unscathed, holding at 70.4 US cents by 4:40pm (AEDT).

However, it was down against most other major currencies at 62.8 euro cents, 80.75 Japanese yen, 48.8 British pence and $NZ1.067.

Source: ABC News

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