Wall St tumble rattles Australian share market

CourierMail.com.au


SHARES gained ground this afternoon following a slump on global stock markets overnight has pushed the local share market lower this morning, with the ASX down more than 2 per cent in morning trade.

Global markets were hit by a surprise and unwelcome spike in US new jobless claims overnight, when already under huge pressure from concerns over the European debt crisis.

Shares fell sharply in morning trade, with the All Ords down 101 points, or more than 2.3 per cent to 4240 at noon.  Markets gained ground in afternoon trade, with the All Ords recovering to be down 0.78 per cent to 4308 at 2.50pm (AEST).

The market is set for its worst weekly performance since mid-November 2008, when the S&P/ASX200 suffered a weekly decline of 8.8 per cent.

Market turmoil spread to Asian markets, with Tokyo's market one stage diving 3.23 per cent.

"This eurozone saga is turning into a bad horror movie,'' Phillip Securities economist Joshua Tan told Dow Jones Newswires.

"You think the monster is dead but it keeps coming back.''

The dollar also suffered one of its worst five-day slides in history, falling almost 8 per cent to US83c and off a staggering 12 per cent off its April highs.

CommSec analyst Juliette Saly said it was a "really ugly day" for investors, with the market being driven by fear.

"The big players are being hit hard, (including the) health, mining, energy and financial stocks."

IG Markets' Ben Potter said panic-selling was rife, "much like what we saw during the GFC".

"The fact that it's a Friday probably won't help things either, with many people looking to take more money off the table ahead of the weekend," he said in a research note.

Global markets continue to fall

US stocks slumped on European debt concerns and bearish US economic data, with the Dow index tumbling more than 3 per cent for its biggest drop in more than a year.

The Dow Jones Industrial Average fell more than 370 points, or 3.6 per cent, to 10,068.01, its third straight day of losses and biggest percentage fall since March 5 last year.

The tech-rich Nasdaq composite fell more than 4.1 per cent to 2204.01 while the broad-market S&P500 shed nearly 4 per cent to 1071.59.

All 30 of the Dow's blue-chip components closed lower, with Bank of America and aluminum producer Alcoa recording the steepest daily drops.

Wall Street remains gripped by the eurozone debt crisis but local factors fuelled the fresh stock plunge.

Fresh government data showed the largest number of Americans lining up for unemployment insurance claims in five weeks while a private survey indicated that the US economic recovery could stall.

A bill to overhaul financial rules and clean up Wall Street also passed a key hurdle Thursday in Congress, a victory for President Barack Obama but a blow to the corporate barons on Wall Street.

"With traders already on edge amid ongoing turmoil in the eurozone, the day's questionable economic reports pushed the remaining bulls over the brink," said analyst Elizabeth Harrow of Schaeffer's Investment Research.

"By the close, the Dow was clinging to the 10,000 level for dear life," she said.