The Australian stock market is trading sharply lower on Wednesday with stocks across various sectors tumbling down on heavy selling on the back of a weak close on Wall Street overnight and renewed worries about global economy following the debt crisis in Eurozone. The recent move to impose higher tax on the revenues of miners has triggered another round of sell-off in that space.
The benchmark S&P/ASX 200 index, which plunged to 4,641.4, is currently trading at 4,650, down 87.1 points or 1.8% from its previous close. The broader All Ordinaries index is down 94.3 points or 2% at 4,659.
On Tuesday, the S&P/ASX 200 index declined 48.4 points or 1% to close at 4,737.1, while the All Ordinaries index ended down 53.9 points or 1.1% at 4,753.2.
Top miners BHP Billiton, Rio Tinto and Newcrest Mining are trading lower by 1.7%-2.2%. Bluescope Steel, Fortescue Metals, Incitec Pivot, Lihir Gold and Orica are all trading in negative territory.
In the energy space, Woodside Petroleum is down more than 2%, Origin Energy is trading lower by about 2.5% and Oil Search is down with a loss of over 3%, while Santos is down with a modest loss.
Among bank stocks, ANZ Bank is down 1.2%, Commonwealth Bank of Australia is trading lower by 1.7%, National Australia Bank is down with a loss of 1.3% and Macquarie Group is down 2.5%.
Westpac Banking Corporation is down as much as 2.7% despite a sharp surge in net profit. Westpac's first-half net profit rose 32% with a stronger economy and lower bad debts buoying up its revenues. Net profit rose to A$2.875 billion for the six months to March 31, from A$2.175 billion in the prior corresponding period, Sydney-based Westpac said in a statement on Wednesday. Cash earnings gained 30% to A$2.983 billion. Westpac declared a fully-franked interim dividend of A$0.65 per share, compared with the A$0.56 paid a year earlier.
Shares of media giant News Corp are trading lower by nearly 4%. News Corp reported a net profit of A$905.75 million for the three months to March 31, 2010, down from A$2.91 billion in the prior corresponding period. The prior year's result included a net gain of A$1.3 billion on the partial sale of its ownership stake in NDS as well as a non-cash tax benefit of A$1.3 billion, News Corp said. The company's third-quarter total segment operating income, or earnings before interest and taxes was A$1.35 billion, up 55% from A$874.45 million reported a year ago.
On the economic front, the services sector expanded in April, according to survey results released Wednesday by the Australian Industry Group and Commonwealth Bank of Australia. The group's Performance of Services Index for April rose 3.4 points from March to a reading of 52.3.
AIG said services sector activity expanded thanks to generally improved business conditions. The new orders sub-category increased 5.5 points to 52.7, the first increase for new orders in five months. AIG also said growth was strongest in communications services. Major consumer based sectors such as retail "remained in negative territory," although the pace of decline eased, AIG said.
In the currency market, the Australian dollar opened notably lower amid renewed fears about Europe's sovereign debt problems. In early trades, the Aussie was quoting at US$0.9090-US$0.9091, down from Tuesday's close of US$0.9207-US$0.9210. The Australian dollar is currently trading at 0.9091 to the U.S. dollar.
Among other markets in the Asia-Pacific region, Malaysia, New Zealand, Singapore and Taiwan are trading notably lower, while Shanghai is trading flat. The Japanese and South Korean markets are closed for Children's Day. Markets across the region closed mostly lower on Tuesday.
On Wall Street, stocks declined sharply on Tuesday, as continued concerns regarding European financial stability spearheaded by the ongoing Greek debt crisis overshadowed upbeat U.S. economic data. The major averages all finished firmly in negative territory, extending last week's losses.
The Dow plunged 225 points or 2% to 10,926.8, the Nasdaq declined by 74.5 points or 3% to 2,424.3 and the S&P 500 slipped by 28.7 points or 2.4% to 1,173.6.
Major European markets saw sharp losses on Tuesday. The U.K.'s FTSE 100 index and the German DAX index both lost 2.6%, while the French CAC 40 index ended 3.6% down.
Oil prices tumbled on Tuesday, suffering the biggest fall in almost three months, as a stronger dollar and expectations for another weekly increase in crude inventories offset the impact of encouraging economic data from the US.
Light, sweet crude for June delivery fell US$3.45 or 4% to settle at US$82.74 a barrel on the New York Mercantile Exchange, registering the most active contract's steepest single-day loss since early February.
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