Shares hammered amid global woes

Close The Australian sharemarket has suffered its biggest drop in nearly four months as investors digested the impact of global geopolitical tensions and some local stocks traded ex-dividend.

At the close, the benchmark S&P/ASX200 index was down 66.4 points, or 1.4 per cent, at a five-week low of 4797.9, while the broader All Ordinaries index fell 62.7 points, or 1.3 per cent, to 4895.9.

Among the sectors, materials dropped 1.6 per cent, financials fell 1.3 per cent and energy shares were 0.7 per cent lower. Gold was the only sector to buck the trend, rising 0.7 per cent.

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Investors are fearing that the recent steep oil price rise, sparked by the turmoil in the Middle East, will weigh on cosumer spending and company profits. Crude oil extended its rally today, rising above $US106.

RBS Morgans director Bill Chatterton said the Australian bourse sank lower than Wall Street as investors turned to cash, while BHP shares went ex-dividend.

‘‘There might have been some profit taking,’’ Mr Chatterton said. ‘‘All the banks got a head of steam in the negative and ... really got a knock on the nose.

‘‘I think there might just be a hiatus, people making sure they’ve got a bit of cash. They’re just a little uncertain as to what’s going to happen over the next couple of months or so. When markets are uncertain, generally they go to cash.’’

Bucking the trend, Australia’s largest gold miner, Newcrest, was up 2 cents at $40.04.

Mr Chatterton said overall the mining and financial stocks suffered the worst losses.

Mining giant BHP Billiton was down 93 cents at $46.32 and Rio Tinto lost $1.37 cents to $84.15.

Among major banking stocks, NAB was down 38 cents at $25.14, Westpac lost 26 cents to $23.22, Commonwealth Bank was down 96 cents at $51.69 and ANZ fell 25 cents to $23.49.

Making headlines, shares in Salmat dropped by almost 6 per cent after cutting guidance because of Telstra cancelling its call centre contract with the group, which will lead to the loss of more than 700 jobs. Salmat shares were down 23 cents, or 5.6 per cent, at $3.89.

Preliminary national turnover was 3.41 billion shares worth $5.83 billion, with 445 stocks up, 748 down and 363 unchanged.

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AAP, Reuters, with BusinessDay