RTTNews - Stock prices tumbled in early trading in the Australian stock market on Thursday as participants headed for the exit route tracking Wall Street cues. Doubts about an immediate revival of the global economy following weak retail sales reports from the U.S. contributed to the sell-off this morning.
Stocks across various sectors are seen struggling this morning with those from materials and energy sectors suffering the most. Financials, utilities and industrials stocks are also trading weak.
The benchmark Australian index S&P/ASX 200 is currently trading at 3,770, down 86 points from its previous close. The All Ordinaries index is down by 87.10 points at 3,755.40
In the materials space, Rio Tinto is plunging by over 9%, BHP Billiton is down by over 4.3% and Newcrest Mining is trading 1.6% down. Orica is down by 1.5%.
In the energy space, Santos, which suffered a big loss yesterday, is down by over 3% now. Worleyparsons is trading nearly 6% down and Woodside Petroleum is trading lower by 4.7%.
In the banking space, ANZ Bank is down by 1.65%, Commonwealth Bank of Australia is trading lower by 2.65% and National Bank of Australia is trading 1.3% down. Diversified financials stock Macquarie Group is down by 3.2%. Media stock News Corp is down with a 4.2% loss.
Shares of capital goods index heavyweight and Australia's largest constructor Leighton Holdings Limited fell sharply after the company reported a 41 per cent drop in nine-month profit to A$220 million from A$375 million in the previous year corresponding period. In the third quarter ending March, the company booked A$15 million in asset impairments on top of A$170 million of writedowns in the first half. The group is likely to record revenue of around A$19 billion and a net profit of A$430 million for the year 2008-2009. The stock is currently trading 6% down from its previous close.
In other corporate news, mining contractor Macmahon Holdings announced that it is looking to raise up to A$460 million in a share sale to new and existing shareholders. The group will be offering the shares at A$0.32 each through an institutional placement and a retail entitlement offer.
In the currency market, the Australian dollar is trading at 0.7532 to the U.S. dollar.
Among other markets in the Asia-Pacific region, Korea and Japan are trading sharply lower. The New Zealand market is also trading weak at present.
The stock markets across the Asia-Pacific region turned in another mixed performance on Wednesday. While Hong Kong's Hang Seng Index fell 0.6 percent, Japan's benchmark Nikkei 225 Index closed up 0.5 percent.
Major European markets all saw considerable weakness on the day, with the U.K.'s FTSE 100 Index closing down 2.1 percent, while the French CAC 40 Index and the German DAX Index fell 2.4 percent and 2.6 percent, respectively.
On Wednesday, gloomy retail sales data for April triggered heavy selling in shares of retailers on Wall Street. Weak crude oil prices took a toll of energy stocks.
The report from the Commerce Department showed that retail sales unexpectedly fell for the second consecutive month in April after showing back-to-back increases in the first two months of the year. According to the report, retail sales fell 0.4 percent in April following a revised 1.3 percent decrease in March. Economists had expected sales to come in unchanged compared to the 1.2 percent decrease originally reported for the previous month.
In other economic news, a separate report from the Commerce Department showed a continued decrease in business inventories in the month of March. The report showed that business inventories fell 1.0 percent in March following a revised 1.4 percent decrease in February.
The major averages all closed firmly negative, with the Nasdaq ending the session at its worst level of the day. The Dow fell 184.22 points or 2.2 percent to 8,284.89, the Nasdaq closed down 51.73 points or 3 percent at 1,664.19 and the S&P 500 fell 24.43 points or 2.7 percent to 883.92.
Economic data is likely to remain in focus on Thursday. Traders are likely to keep a close eye on the Labor Department's weekly jobless claims report along with its report on wholesale price inflation for the month of April.
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