RTTNews - Tracking the overnight cues from Wall Street where stock prices tumbled after the World Bank predicted a sharper contraction for the global economy this year, the Australian market opened on a highly negative note on Tuesday with stocks across various sectors plunging sharply on selling pressure.

Mirroring heavy across-the-board sell-off, the Australian benchmark index S&P/ASX 200 slipped to 3,800, losing as much as 118 points from its previous close. The index is currently trading 102 points or 2.6% down at 3,816.2. The broader All Ordinaries index is down by around 114 points or 2.92% at 3,797.

The S&P/ASX 200 index had ended up 18.60 points or 0.48% at 3,918 on Monday. The All Ordinaries index ended at 3,911, up 16.40 points or 0.42% over its previous close.

With oil and commodity prices tumbling, resource-related stocks are taking a severe beating this morning. Financials, healthcare, industrials and utilities are also down sharply in the red. Technology stocks are faring relatively better.

Among materials stocks, BHP Billiton and Rio Tinto are down by over 4%. Bluescope is down with a loss of 5%, Lihir Gold and Newcrest Mining are trading lower by about 4%, and Orica and Onesteel are down by 2% and 3.5% respectively.

Energy stocks Woodside Petroleum, Origin Energy, Oil Search and Santos are also trading sharply lower.

In the banking space, ANZ Bank is down by 2.7%, Commonwealth Bank of Australia is trading lower by 2.5%, National Australia Bank is down 2.2% and Westpac Banking Corporation is down by 2.6%. Diversified financials major Macquarie Group is down by over 4%.

In the currency market, the Australian dollar opened lower on Tuesday, after risk averse investors fled the commodity currency and equity markets for the safe-haven U.S. dollar. The Australian dollar is currently trading at US$0.7837. In early trading, the local unit was quoted at US$0.7860/62, down from Monday's close of US$0.7988/93.

Among other markets in the Asia-Pacific region, Japan, Korea and New Zealand are down sharply in the red with their key indices losing 1.5%-2.5%. Most of the markets in the region ended Monday's session with moderate gains. Japan's benchmark Nikkei 225 Index closed up 0.4 percent, while Hong Kong's Hang Seng Index finished up 0.8 percent.

On Wall Street, stocks tumbled after the World Bank cut its forecast for the global economy and warned of a large decline in international capital flows amidst the financial market fragility. The World Bank said it now expects the world economy to shrink by 2.9 percent this year, larger than its earlier prediction of a 1.7 percent decrease.

The Dow closed lower by 200.72 points or 2.4 percent to 8,339.01, the Nasdaq fell by 61.28 points or 3.4 percent to 1,766.19 and the S&P 500 dropped 28.19 points or 3.1 percent to 893.04.

Major European markets closed firmly on the downside. The French CAC 40 Index and the German DAX Index both finished down by 3 percent, while the U.K.'s FTSE 100 Index dropped by 2.6 percent.

On Monday, crude oil plunged to its lowest close in 19 days as the World Bank's discouraging economic forecast led to worries over energy demand. Light sweet crude fell to US$66.93, a drop of US$2.62 for the session. Prices hit as low as US$66.25. The more-actively traded August crude contract fell US$2.52 to US$67.50 per barrel.

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