Australian market closes down as big banks tank amid bad debt concerns

The local share market got off to a dismal start to the trading week following the Easter break, with losses across the board.

The heaviest falls were for healthcare and bank stocks, but few corners of the market were spared.

Investors are cautious ahead of a speech by the head of the US Federal Reserve early tomorrow morning, waiting for any hints on when the Federal Reserve is likely to raise interest rates again.

The All Ordinaries index shed 75 points to close at 5,076, and the ASX 200 index finished 1.6 per cent lower at 5,005.

The healthcare sector had the biggest losses — Mesoblast shed 5.1 per cent to $2.43.

Financial stocks also tumbled — the big banks all lost ground on growing concerns about their exposure to bad debts, especially in the resources sector.

Last week, ANZ and Westpac flagged more provisions for bad loans, and analysts are now looking at whether the problem is likely to be more widespread across the banks.

ANZ fared the worst of the big lenders, dropping 3.4 per cent to close at $23.20.

Organic baby food maker Bellamys was among the biggest losers on the benchmark index, dropping 6.5 per cent to $10.14 on reports China will impose a new tax on goods bought through foreign websites.

Bellamy's is one of several firms that has been cashing in on soaring demand for Australian-made baby formula in China.

Elsewhere, Medibank Private bucked the trend, closing 0.4 per cent higher at $2.85.

Australia's biggest private health insurer, Medibank, has appointed a former banker as its new chief executive.

The former NAB executive Craig Drummond will replace Medibank's current chief George Savvides from July.

The once publicly owned health insurer was listed on the stock exchange just over a year ago.

At about 6:00pm AEDT, the dollar was steady against the greenback, buying 75.5 US cents.

It also fetched 67.5 euro cents, 85.8 Japanese yen and 53.1 British pence.

Spot gold was slightly lower at $US1,219 an ounce. Oil prices continued to fall, extending overnight losses — Brent crude was buying just under $US40 a barrel.

Source: ABC News

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