The stock market in Australia declined on Tuesday, taking cues from Wall Street where the major indices declined sharply, led by automakers after the Obama Administration indicated that General Motors (GM) and Chrysler have not gone far enough in their restructuring plans and need to step up their efforts to reorganize in order to receive additional government aid.
A statement from the Deputy Governor of Reserve Bank of Australia that the country's economy might decline during 2009 amid global slowdown also weighed on the markets.
On Monday, the Dow closed down 254.16 points or 3.3% at 7,522, the Nasdaq closed down 43.40 points or 2.8% at 1,502 and the S&P 500 closed down 28.41 points or 3.5% at 787.
In Asian trading, crude oil rose 1.22% or $0.59 to $49.00 a barrel. Light sweet crude for May delivery closed at $48.41 per barrel on the New York Mercantile Exchange on Friday, down $3.97 a barrel.
The markets, having opened lower from their previous close on weaker cues from Wall Street, continued to linger in negative territory amid volatile trading despite attempts to stage a recovery. Positive news from Macquarie Group powered the stocks into positive territory briefly in late afternoon, but the markets could not sustain the gains, eventually ending in the red, slightly above the day's low. Resource and financial stocks led the declines.
The benchmark S&P/ASX 200 index declined 0.60% or 22.30 points to close at 3,582 and the broader All Ordinaries index lost 21.90 points or 0.60% to close at 3,532.
On the economic front, Reserve Bank of Australia's financial aggregates data for February showed that credit issued to the private sector in Australia was up 5.4% on year in February, while credit issued was steady with a 0.5% gain on month.
In the resources sector, index leader BHP Billiton fell 1.97% and Rio Tinto shed 1.10%, on lower commodity prices.
Gold miners ended higher, despite gold closing lower for a second straight session on Monday. Lihir Gold advanced 1.55%, Sino Gold gained 2.72%, and Newcrest Mining rose 1.30%.
Among energy stocks, Woodside decreased 2.83%, and Oil Search lost 4.01%, while Santos ended higher by 0.66% after the oil and gas producer submitted a draft environmental impact statement for the A$7.7 billion liquefied natural gas project near Gladstone in Queensland in a joint venture with Malaysia's state-owned Petronas.
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