3 Jun 2011

Aust sharemarket takes $A30bn hit

5:57 am on 3 June 2011

Analysts say about $A30 billion was wiped off the Australian share market on Thursday in the biggest single-day fall in almost a year.

The big drop follows news that the Australian economy has suffered its worst contraction in 20 years.

The ABC said global markets plunged overnight and there was no reprieve on the local market, with trade starting in the negative and falls extending throughout the day.

The All Ordinaries lost 105 points to close at 4683, while the ASX 200 dropped 107 points to 4600.

Commsec analyst Steve Daglian says this was a result of the plunge seen overnight on Wall Street, which had its biggest fall in 12 months. This followed weaker-than-expected employment and manufacturing data highlighted the precarious state of the American economy.

Moody's ratings agency also had a hand in the market meltdown by downgrading Greece's credit rating.

Most analysts expect the shares to recover a little on Friday as bargain hunters enter the market.

NZ market steady

The NZX 50 benchmark index fell 26 points, or 0.7%, on Thursday.

However, Tokyo shares closed down 1.69% on concern about the weak US economic data, along with political uncertainty over Japan's prime minister facing no-confidence vote.

Europe's markets were well down in early trading. And shares in Hong Kong and China also fell, with Shanghai's main index slumping to a four-month low.