The share market has dropped to a four-month low as all sectors lost ground and the heavyweight banking and mining sectors suffered steep falls.
The benchmark S&P/ASX200 lost 87.4 points, or 1.52 per cent, to 5,667.5 points, its lowest closing level since February 9.
CMC Markets chief market analyst Ric Spooner said negative sentiment towards the banks partly spilled over to other sectors, while disappointing government spending and net exports figures added to the gloom.
Weaker iron ore and oil prices also continued to drive investors away from the miners and energy players.
“The weaker net export figures this morning were a negative for sentiment but the key driver is the wind back in expectations for key sectors of the market,” Mr Spooner said.
“Our index started to break down into new lows during afternoon trade that just fuelled the sell-off even further.”
A drop in export volumes in the March quarter pulled the Australian dollar to a low of 74.57 US cents, but it recovered after the Reserve Bank of Australia left the cash rate on hold and said it expects a gradual increase in economic growth over the next couple of years to above three per cent.
The local currency was trading at 74.74 US cents at 1700 AEST, up from 74.67 US cents on Monday.
On the share market, the big four banks all dropped more than 1.3 per cent, with National Australia Bank the worst performer, losing 1.7 per cent.
Regional lender Bendigo and Adelaide Bank shed three per cent, partly due to its decision to change accounting procedures for its Homesafe product that allows retirees to access equity in their homes.
That move has been interpreted by some analysts as further evidence the Sydney and Melbourne property markets have peaked, and led to further selling of banking and real estate stocks.
BHP Billiton dropped 1.4 per cent to be the worst performer among the big miners, while Santos was the weakest in the energy sector, down 3.4 per cent.
Gold miner Newcrest Mining was one of a few stocks to rise, adding 0.9 per cent to $21.63, while fellow gold miner Evolution rose 1.18 per cent to $2.58.
ON THE ASX:
* At the close, the benchmark S&P/ASX200 was down 87.4 points, or 1.52 per cent, at 5,667.5 points
* The broader All Ordinaries index was 84 points, or 1.45 per cent, at 5,708.1 points
* The June SPI200 futures contract was down 99 points, or 1.72 per cent, at 5,665 points.
* National turnover was 2.04 billion securities traded worth $6.1 billion.
CURRENCY SNAPSHOT AT 1700 AEST:
One Australian dollar buys:
* 74.74 US cents, from 74.67 US cents on Monday
* 81.92 Japanese yen, from 82.55 yen
* 66.33 euro cents, from 66.30 euro cents
* 57.82 British pence, from 58.02 pence
* 104.31 New Zealand cents, from 104.78 NZ cents
GOLD:
The spot price of gold in Sydney at 1700 AEST was $US1,288.29 per fine ounce, up $US8.60 from $US1,279.69 on Monday.
BOND SNAPSHOT AT 1630 AEST:
* CGS 4.50 per cent April 2020, 1.6396pct, from 1.6622pct
* CGS 4.75pct April 2027, 2.3733pct, from 2.3955pct
Sydney Futures Exchange prices:
* June 2017 10-year bond futures contract at 97.6 (implying a yield of 2.4pct), from 97.58 (2.42pct) on Monday
* June 2017 3-year bond futures contract at 98.32 (1.68pct), from 98.3 (1.7pct).
(*Currency closes taken at 1700 AEST previous local session, bond market closes taken at 1630 AEST previous local session)
