News from AAP

Aust market falls more than one per cent

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The Australian market has closed sharply lower, led downwards by the big banks as investors decided to put their money elsewhere.

CMC Markets chief market analyst Ric Spooner said the Australian market had a disappointing day after finishing Wednesday with some drive, and getting a reasonably positive lead from US and other overseas markets.

“Yet despite all that, we are having a pretty negative day,” Mr Spooner said.

“It has the look of overall portfolio selling – people looking to reduce their general exposure to the Australian equities market.”

Mr Spooner said foreign investors may be shifting their money because the weakening Australian dollar was affecting the value of their Australian share holdings.

He said disappointing Australian retail figures out on Thursday may have added to the negative sentiment.

Among the major banks, the Commonwealth fell $1.66 to $71.97, ANZ dropped 46 cents to $26.96, Westpac retreated 23 cents to $30.19, and National Australia Bank lost 77 cents to $29.93.

In the resources sector, global miner BHP Billiton shed 31 cents to $24.32, and Fortescue Metals added 3.5 cents to $1.89.

Rio Tinto was down 27 cents to $49.27 after it outlined plans to cut more costs from its iron ore operations as it deals with falling prices.

In the retail sector, Coles-owner Wesfarmers descended 32 cents to $39.43, and homewares retailer Harvey Norman dumped 17 cents at $4.00.

Official figures released on Thursday showed that retail spending in July fell – the first time in more than a year – dragged down by a drop in spending on household goods.

Department store operator Myer plunged 23.28 cents, or 20.55 per cent, to 90 cents after the completion of the first part of the department store’s $221 million capital raising.

Shares in outdoor adventure gear retailer Kathmandu fell 5.5 cents to $1.445 as the Briscoe Group’s takeover offer remains unchanged and Kathmandu remains unmoved.

KEY FACTS

* On Thursday, the benchmark S&P/ASX200 index was down 73.7 points, or 1.44 per cent, at 5,027.8 points.

* The broader All Ordinaries index was down 70.7 points, or 1.38 per cent, at 5,048.7 points.

* September share price index futures contract was down 45 points at 5,005 points, with 42,424 contracts traded.

* The price of gold in Sydney at 1700 AEST was $US1,132.70 per fine ounce, down $US8.50 on Wednesday’s price of $US1,141.20.

* National turnover was 1.7 billion securities worth $4.98 billion.