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MELBOURNE - The Australian stock market closed almost two per cent lower today amid uncertainty on the short selling ban and concerns over the effectiveness of the US government's proposed bailout of the financial sector.
The Australian Securities and Investments Commission (ASIC) today decided to permit limited naked short sales after widening on Sunday a ban on "naked" short selling of stock to include "covered" short selling.
At the close today, the benchmark S&P/ASX200 index was 97 points, or 1.93 per cent lower at 4923.5, while the broader All Ordinaries lost 92.4 points, or 1.83 per cent, to 4957.7.
At 1620 AEST on the Sydney Futures Exchange, the December shares price index contract was 36 points lower at 4,995, on a volume of 32,016 contracts.
MF Global senior trader Anthony Anderson said the gold miners and Telstra acted as "safe havens" in the volatile market today, with the big miners and banks weighing on the bourse.
"People are waiting for some real clarity on the short selling, some clarity on what the Fed is going to do on the US situation and until we get that we're in holding pattern," Mr Anderson said.
"The market has a direction, it is weaker, but it has really just dropped to where it is and is drifting."
The US government has proposed US$700 billion (A$830.47 billion) salvage plan for US financial firms.
Locally, BHP Billiton fell $1.80, or 4.53 per cent, to $37.90, rival Rio Tinto dropped $2.76, or 2.49 per cent, to $108.24 and Fortescue Metals shed 64 cents, or 8.95 per cent, to $6.51.
The banking sector was weaker, with ANZ losing $1.11 to $18.04, Commonwealth Bank falling 38 cents to $44.22, National Australia Bank giving up 44 cents to $23.86 and Westpac shedding 20 cents to $24.50.
The retailers were mixed, with Harvey Norman adding one cent to $3.51, Woolworths dropping 52 cents to $27.01, Wesfarmers retreating 57 cents to $31.18 and David Jones falling one cent to $4.39.
Luxury goods retailer Oroton gained one cent to $3.40 after out-performing most of its rivals and reporting a 70 per cent surge in annual profit to $16.74 million.
Solomon Lew's investment vehicle Premier Investments lost 26 cents to $4.55 after the company said the retail environment in Australia and New Zealand would continue to be difficult, and may weigh on the performance of its newly-acquired Just Group.
The media sector was mixed, with Consolidated Media Holdings putting on three cents to $2.75, Fairfax falling 13 cents to $2.85, News Corp shedding 71 cents to $15.78 and its non-voting shares losing 70 cents to $15.51.
Telecommunications provider SP Telemedia lost one cent to 14 cents after reporting a full year loss of $18.93 million following debt write-offs, and cut its earnings guidance for the new year.
The energy sector was mixed despite a jump in the oil price overnight, with Santos adding 17 cents to $18.70, Woodside falling one cent to $56.99 and Oil Search dropping nine cents to $5.53.
Coal miner New Hope Corp lost six cents to $4.40 despite forecasting significant earnings growth this year and delivering a rise in annual profit to $90.68 million.
The spot price of gold was higher was trading at US$891.30 an ounce by 1630 AEST, up US$20.15 on yesterday's local close of US$871.15 an ounce.
The gold miners were stronger, with Newcrest adding $1.34 to $26.84, Lihir putting on 12 cents to $2.77 and Newmont gaining 16 cents to $5.15.
Telstra was the most traded stock on the market, with 42.05 million shares changing hands, collectively worth $172 million.
The telco put on 16 cents to close at $3.98.
Preliminary market turnover reached one billion, worth a total value of $3.9 billion, with 384 stocks moving up, 641 stocks moving down and 298 unchanged.
- AAP
