Australian Stocks Slding
THE stockmarket was sharply lower by late afternoon and the weak Australian dollar remained vulnerable as investors reeled amid fears about the risks of slowdown in the global economy.
Markets in Asia were also not immune to the steep falls on Wall Street last Friday, as investors sought shelter in the yen and the US dollar as well as government bonds in countries that were considered by financial markets to have little exposure to the Europe’s widening debt crisis.The weakness in the Australian dollar was compounded by the decline in the euro, which fell below $US1.19 in Asian trading today for the first time since March 2006, as the European sovereign debt troubles spread to Hungary and investors reduced risky currency bets.
The Australian dollar fell just below US81c in the morning session, taking its losses since Friday’s domestic close to as much as 4.3 per cent. Since mid-April the Australian dollar has slid by more than 13 per cent.
By late this afternoon, the Aussie dollar had recovered some losses to be trading at US81.44c.
The benchmark S&P/ASX 200 index had fallen almost 150 points in the morning session — equivalent to a 3.4 per cent decline — and had briefly dipped below 4300 points. Since its 2010 intraday peak of 5025.10, touched mid-April, the S&P/ASX 200 has dropped about 14 per cent.
By late afternoon today, the S&P/ASX 200 was down 131.2 points, 2.95 per cent, to 4318.2 and the broader All Ordinaries was 2.88 per cent lower at 4343.6.
“We simply can’t get a feel for this market,” IG Markets analyst Ben Potter said in a note late this afternoon.
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