The share market has taken a second straight sharp fall due to falls across the energy, resources, consumer staples and financial sectors.
The benchmark S&P/ASX 200 index dropped 1.2 per cent, following Wednesday’s 1.5 per cent fall, taking it to its lowest closing level since September 19.
Patersons Securities economist Tony Farnham said the energy sector was weaker because of a drop in oil prices overnight on fears the recent OPEC deal to freeze oil production could unravel.
“We’ve now got Iran, Iraq, Nigeria and Libya saying they want exemptions from any freeze so it’s starting to fracture just a little bit,” he said.
Woodside Petroleum, Oil Search and Origin Energy fell by between 1.5 per cent and 2.9 per cent.
Resource heavyweights BHP Billiton and Rio Tinto fell 29 cents to $22.55 and seven cents to $53.30, respectively, after base metals prices were mixed.
Early morning gains in the financial sector came off a little bit on the back of some profit taking, Mr Farnham said.
National Australia Bank “pleased income investors” by maintaining its dividend at 99 cents a share after some analysts forecast the bank would cut its dividend to lift its capital, Mr Farnham said.
“There’s still going to be the ongoing debate about whether they now actually instigate a cut sometime in 2017,” Mr Farnham said.
NAB gained 13 cents to $27.59 after hitting an intra-day high of $28.10.
Commonwealth Bank dropped $1.20 to $72.99, Westpac lost 20 cents to $30.40 and ANZ shed 16 cents to $28.10.
Retail heavyweight Wesfarmers continued to lose ground as analyst downgrades filtered through following disappointing first quarter sales on Wednesday, Mr Farnham said.
Wesfarmers dropped $1.13 to $40.32, while staunch rival Woolworths, which is set to report first quarter sales on Friday, fell 32 cents to $24.80.
Blackmores recovered from its early morning losses to finish $1.35 higher at $105.74 after the vitamin and health product supplier warned it is unlikely to match last year’s net profit of $100 million after first quarter earnings nearly halved due to a slump in Australian sales.
KEY FACTS:
* The benchmark S&P/ASX 200 index was down 64.3 points, or 1.2 per cent, at 5,295.5 points.
* The broader All Ordinaries index fell 63.7 points, or 1.17 per cent, at 5,378.4 points.
* The December share price index futures contract dropped 79 points to 5,253 points, with 37,274 contracts traded.
* National turnover was 3.3 billion securities traded, worth $7 billion.
