stock market
THE Australian sharemarket has followed its global peers lower after the oil price fell back to $US30 a barrel following a brief bounce.
Oil prices resumed their downward slide overnight, heightening concerns about global growth and pressuring the local bourse as resources stocks and financials sank at the open.
The market gloom was exacerbated by a fresh plunge in BHP Billiton shares as investors pulled out of the stock before it likely cuts its dividend this month.
National Australia Bank’s stock also slumped after it began trade divorced from its Clydesdale banking assets.
At the market open, the benchmark ASX 200 index was down 72.4 points, or 1.5 per cent, at 4920.9.
The broader All Ordinaries index was down 69.2 points, or 1.4 per cent, at 4974.8.
The oil crash returned with vigour after energy giants Exxon Mobil and BP both logged sharply worse balance sheets overnight.
Exxon Mobil’s fourth-quarter profit was down 58 per cent, while BP’s fourth-quarter loss of $US2.2bn was a blowout from $US969 million a year earlier.
US Nymex crude plunged 5.5 per cent to $US29.88 a barrel, while global benchmark Brent fell 4.4 per cent to $US32.72.
Investors rushed to the exits on Wall Street, where the Dow Jones Industrial Average was 1.8 per cent lower at the close.
The S&P 500 fell 1.9 per cent and the Nasdaq Composite Index lost 2.2 per cent.
But the Australian dollar remained largely steady overnight, and after the RBA yesterday maintained its easing bias, buying US70.5c by midmorning.
Iron ore was an unusual bright spot on commodities markets, rising 1.4 per cent to $US43.10 a tonne.
BHP Billiton tanked at the open today, following yesterday’s S&P credit rating downgrade.
“Interestingly, Standard & Poor’s went further to say that if BHP maintains, its controversial dividend policy, it will contemplate another cut to A-,” Rivkin chief Scott Schuberg said.
“So with that threat fuelling calls for a more sustainable dividend policy, one would think it is now likely that a change to that policy will be released alongside BHP’s half-year earnings announcement on 23 February.”
In local economic news on Wednesday, the Australian Bureau of Statistics is due to release December’s building approvals figures and international trade in goods and services data for the same month.
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