29 Jul 2008

Australian stocks open lower after IMF report

1:15 pm on 29 July 2008

The Australian share market opened almost 1% lower on Tuesday, after an International Monetary Fund report predicted continuing problems in credit and housing markets.

At 1016 AEST the benchmark S&P/ASX200 index fell 45.7 points, or 0.93 per cent, to 4876.4, close to the year's low of 4,815.7 on 15 July. The broader All Ordinaries lost 38.9 points to 4,951.

The September share price index futures contract slumped 80 points to 4,857 on a volume of 5,497 contracts.

ANZ Banking Group, which flagged a $A1.2 billion second-half provision on Monday, fell 32 cents, or 2.02%, to $A15.49.

National Australia Bank, which wrote down $830 million on risky US mortgages on Friday, declined 73 cents, or 2.83%, to $A25.07.

Commonwealth Bank of Australia slipped $1.77, or 4.31%, to $A39.33; Westpac dropped 81 cents, or 3.98%, to $A19.52; and St George slumped $A1.16, or 4.43%, to $A25.04.

Other markets also down

Stocks in the United States fell 2.1% on Monday.The Dow Jones Industrial Average slumped 2.11% to 11,131.08, Standard & Poor's 500 broad-market index lost 1.86% to 1,234.37 and the Nasdaq composite slipped 2% to 2,264.22.ò½

Trading volume was light on the New York Stock Exchange, with about 1.17 billion shares changing hands. About 1.96 billion shares were traded on the Nasdaq.

European stocks also ended lower on Monday, as banks fell on concerns over credit ratings at major US mortgage lenders and by a rise in crude oil prices.

Standard & Poor's warned on Friday it may cut its ratings on Fannie Mae and Freddie Mac.

UBS fell 5.5%, Royal Bank of Scotland dropped 4.7% and Barclays lost 5.3%.

The pan-European FTSEurofirst 300 index ended down 0.9% at 1,158.86 points.

In Frankfurt, the DAX index ended at 6,351.15 points, down 85.56 or 1.33%.

In Paris, the CAC-40 index closed at 4,324.45 points, down 52.73 or 1.2%. In Zurich, the Swiss market index closed at 6,968.93 points, down 46.1 or 0.66%.

In Britain, the FTSE 100 ended 40 points lower, 0.8%, at 5,312.6 after losing 0.4% last week. The index is down nearly 18% to date this year.