After negative leads the Australian share market extended losses throughout the day to close almost two per cent down, slumping to a two month low. All sectors closed in the red, with losses accelerated by the banks following renewed concerns over Europe’s sovereign debt position.
The S&P/ASX200 Index dropped 89 points to close at 4,643. On the futures market, the SPI is down 93 point lower.
Company news: The head of ANZ Banking Group (ASX:ANZ) has issued a dire warning on funding costs, advising that they will rise as a result of Europe’s debt woes. Speaking to Bloomberg, CEO Mike Smith said Europe shows no sign of sorting out its problemand that will mean funds will be more expensive. The comments come as ratings agency Moody's last week cut the credit ratings of Australia’s big four banks, ANZ, Commonwealth Bank, Westpac and National Australia Bank, citing concern over relatively high levels of wholesale funding. Shares in ANZ Bank ended the day 3.38 per cent down at $22.02.
Fortescue Metals Group Ltd (ASX:FMG) has been downgraded by UBS to neutral from a buy. The cut has come due to concerns that record high prices for iron ore could dip by as much as 13 per cent. UBS expects the spot iron ore price to weaken to $US150 a tonne in the second-half of this year. Shares in Fortescue ended the day 1.71 per cent down at $6.33.
The head of Qantas Airways Ltd’s (ASX:QAN) regional airlines unit has told the Australian Financial Review that it’s targeting an extra $150 million in annual revenue through capitalising on the mining boom by servicing fly-in fly-out mine workers.
Just one week after Qantas’ budget arm Jetstar consolidated its fare options from five to two, Virgin Blue Holdings Ltd (ASX:VBA) has followed suit and revealed a new fare structure that comprises of saver, flexi or premium fares aimed at simplifying its fare structure.
Shares in Elders Ltd (ASX:ELD) fell over 9 per cent today after the agribusiness booked a first half loss of $14.6 million and downgraded its full-year profit forecast.
Shares in BHP Billiton Ltd (ASX:BHP) dropped 1.73 per cent today after the global miner withdrew from its Zambian copper joint venture with Blackthorn Resources Ltd (ASX:BTR), who’s shares finished the day over 8 per cent down.
best and worst performers, and all closed in the red: The sectors with the smallest losses was Utilities easing 40 points to close at 4,326. The worst performing sector was Financials Excluding Real Estate Investment Trusts, dropping 125 points to close at 5,036. The best performing stock in the S&P/ASX200 was AlacerGold shares rose 5.99 per cent to close at $8.67. Shares in SP AusNet and Riversdale Mining also closed in positive territory today. The worst performing stock was Gunns, shedding 10.26 per cent to close at $0.35. Shares in White Energy and Elders also tumbled today.
Commodities: Gold is trading at $US1,510 an ounce. Light crude is down $1.59 cents at $US98.51 a barrel.
