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ASX200 lower on banks, energy stocks

9News.com.au logo9News.com.au 12/10/2018 AAP

a man holding a microphone: Nine’s Finance Editor Ross Greenwood looks at the likely impact of Wall Street losses on the Australian share market. © Provided by Nine Digital Pty Ltd Nine’s Finance Editor Ross Greenwood looks at the likely impact of Wall Street losses on the Australian share market. The Australian share market was lower at midday, dragged down by the big banks and energy stocks hit by plunging oil prices.

The benchmark S&P/ASX200 index was down 10.1 points, or 0.17 per cent, at 5,873.7 points at 1200 AEDT on Friday,

The broader All Ordinaries was down 8.1 points, or 0.14 per cent, at 5985.4, while the Australian dollar was buying 71.27 US cents from 70.70 on Thursday.

Thursday's trade wiped an estimated $50 billion off the share market in its worst day since February as the benchmark ASX200 dipped 2.7 per cent to a five-month low.

The market was as much 0.6 lower in early trade on Friday and, despite clawing back some of its early losses, was still on track for its worst week since January 2016.

The energy sector was down 1.78 per cent with Santos, Oil Search Limited, Woodside Petroleum and Origin Energy all down between 1.58 and 2.58 per cent.

The banks are also in the doldrums as ANZ faced the same parliamentary grilling dished out to Commonwealth Bank and Westpac on Thursday.

The big four are all in the red with ANZ leading the losses - as it did on Thursday - at 1.11 per cent down.

Macquarie Group shares are still falling, losing another 1.37 per cent to sit at $113.91.

The market absorbed data showing falls in home loan approvals, with owner-occupiers receding 2.1 per cent in August, surpassing market expectations of a 1.4 per cent fall.

Gold miners were among the only to enjoy gains during Thursday's bloodbath but a slight rise in copper and iron ore overnight spread the joy to the other big players.

BHP was up 0.99 per cent to $33.73 and Rio Tinto gained 1.94 per cent to $78.10 at noon.

Investors continued to flock to safe-haven gold with local gold miners Northern Star, St Barbara, Newcrest Mining, and Evolution up between 2.95 and 6.43 per cent.

Overnight, Wall Street indexes extended their decline into a sixth session as volatility spiked and investors shunned risky investments.

The Dow Jones Industrial Average was down 545.91 points, or 2.13 per cent, to 25,052.83, the S&P 500 lost 57.31 points, or 2.06 per cent, to 2,728.37 and the Nasdaq dropped 92.99 points, or 1.25 per cent, to 7,329.06.

a person on a computer: Wall Street shock © Provided by Nine Digital Pty Ltd Wall Street shock

This would mark the sixth straight day of losses for the market, which has been rattled by rising interest rates, signs of a slowdown in the global economy and the US-China trade dispute.

All of those factors could threaten the impressive profits Corporate America has been reporting this year.

The Nasdaq fell 99 points, or 1.3 percent, to 7,322.

The overnight falls will no doubt have many local investors on tenterhooks after the ASX ended its second worst day of the year yesterday.

Stock indexes in the United Kingdom, Germany and France all fall by more than 1%. Benchmark indexes in Shanghai and Tokyo closed down 5.2% and almost 4%, respectively. Hong Kong's market was down over 3%.

Rakuten Securities Australia's chief operating officer Nick Twidale said the tumble on Wall Street triggered markets to fall across the Asia Pacific region.

US-China situation trade tensions have escalated in the past week, with China, on Friday, reducing its reserve requirement ratio, or the amount of cash that banks have to hold in reserve, a move that seemed in retaliation to the US, Mr Twidale said.

The other main contributing factors weighing on the market were the IMF's cut to growth forecasts yesterday and continuing strength in US bond yields.

Whatever the tipping point, overnight they all seemed to come together in an almost "perfect storm", he said.

Mr Twidale expects the Australian markets will fall lower over the next few days, and warned of lingering wariness in the market as traders fear a further deterioration in US-China trade relations.


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