25 May 2013

2nd day of falling share prices in Australia

10:43 am on 25 May 2013

Australian shares recorded a second consecutive day of heavy falls on Friday.

After brief early gains, the market was in a downward drift all day, leaving the All Ordinaries index 1.5% lower at 4,964 by the close of trade.

The ASX 200 was off 79 points to 4,983, following a drop of 2% on Thursday.

In total, more than $A50 billion was wiped off the value of the Australian share market on Thursday and Friday.

Analysts said there have been mixed messages from the US Federal Reserve, sparking fears that stimulus measures in the United States may start being wound back in the near future.

The ABC reports the flow of stimulus money and very low interest rates on safe assets, such as government bonds, have been behind a rapid increase in share prices over the past six months as investors seek higher returns.

The resources sector was also generally lower, with BHP Billiton down 1.5%, Rio Tinto down 1.1% and Woodside off 1.3%.

However, gold miners bucked the trend and there was a small rise in the value of the gold to $US1389 per ounce by 5:51pm (AEST).

Newcrest was up nearly 4% to $A15.12, and Kingsgate 8.8% to $A1.55.

The ABC reports the Australian dollar was trading at 96.63 US cents, 0.7475 euros and 98.2 yen.