Australian shares have hit a near 11-month low as investors head into what has been labelled possibly the most crucial weekend in history for financial markets.
Negotiations will continue in coming days after Republican leaders in the US House of Representatives postponed a vote on legislation to avert the threatened August 2 debt default.
“We’re basically standing on the edge of an abyss peaking over, with the bottom nowhere to be seen,” IG Markets strategist Ben Potter said.
“That’s the situation facing all financial markets heading into a weekend that could prove to be one of the most crucial in history.”
At 1615 AEST on Friday, the benchmark S&P/ASX200 index was down 39.2 points, or 0.88 per cent, at 4,424.6, and the broader All Ordinaries index was down 38.7 points, or 0.85 per cent, at 4,500.5.
Both indices were at their lowest points since the close on August 31 last year.
On the ASX 24, the September share price index futures contract was 42 points weaker at 4,389, with 39,967 contracts traded.
All sectors posted falls, reflecting the general unease among investors.
“Investors are understandably nervous with a potential default looming early next week,” Mr Potter said.
“This latest development has cast even more doubt on whether or not a deal can be done over the weekend as it fuels concerns over a lack of unity within the Republican party.”
BHP Billiton, which announced a $254 million expansion of its manganese operations in the Northern Territory, lost 61 cents to $41.42, and Rio Tinto dropped $1.20 to $80.00.
Origin Energy shed eight cents to $14.69, despite posting record full year production and sales revenues.
Among the banks, Westpac lost 23 cents to $20.42, Commonwealth dropped 17 cents to $49.27, National Australia Bank shed 18 cents to $24.00 and ANZ was 16 cents weaker at $20.83.
Macquarie Group added to its Thursday losses, down 42 cents to $27.57.
Property stocks also fell heavily, with Stockland down eight cents to $3.05, Australand down five cents to $2.51 and Mirvac shed two cents to $1.15.
Resources services firm Worley Parsons was the worst performer among the top 100 stocks, down 99 cents, or 3.47 per cent, to $27.51.
Lynas was the best performer, adding six cents, or 2.87 per cent, to $2.15.
Asciano, AGL Energy and Foster’s also posted gains of between one and two per cent.
The spot price of gold in Sydney was at $US1,613.30 per fine ounce at 1629 AEST, down $US1.39 from Thursday’s local close of $US1,614.69 per ounce.
Newcrest Mining lost 62 cents to $39.55.
National turnover was 2.23 billion shares worth $7.5 billion, with 397 stocks up, 683 down and 347 unchanged.
AAP
