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PERTH - The Australian stock market closed in negative territory amid waning investor confidence after US stocks tumbled over 4 per cent in the biggest sell-off since December.
The benchmark S&P/ASX200 index was down 14.3 points, or 0.41 per cent, at 3,474.4, while the broader All Ordinaries index fell 10.5 points, or 0.31 per cent, to 3,418.1.
On the Sydney Futures Exchange at 1615 AEDT, the March share price index contract was three points lower at 3,430 on a volume of 27,358 contracts.
"The market's holding up much better than we had expected, especially given the carnage on Wall Street," IG Markets research analyst Ben Potter said.
The Dow Jones Industrial average index on Wall Street fell 4.6 per cent after the latest bank bailout plans fell short of market expectations.
Mr Potter said there were signs the Australian market was starting to decouple from the US "as market participants realise how strong our underlying system is on a relative basis, especially the banks".
"Commonwealth Bank and Rio are really driving sentiment, with both stocks well off their lows."
Commonwealth Bank gained 32 cents, or 1.08 per cent, to $29.92 despite warning that its dividends may fall after first half core earnings were dented by bad corporate debts and a profit fall in its wealth management arm.
"The doubtful debts charge of $1.61 billion raises some concerns," Mr Potter said.
"The bank had forecast a full year charge of $2.5 billion, which doesn't give it much headroom given that conditions are continuing to worsen."
Westpac inched one cent lower to $16.17, National Australia Bank slipped five cents to $18.70 and ANZ dropped 43 cents to $12.02.
The big diversified miners were mixed following lower base metals prices on the London Metal Exchange overnight. BHP Billiton shed 98 cents, or 2.94 per cent, to $32.37 while rival Rio Tinto put on $3.04, or 6.21 per cent, to $52.00.
Rio Tinto is expected to deliver an underlying profit of up to US$9.7 billion (A$14.8 billion) on Thursday, underpinned by an increase in iron ore and coal prices.
Speculation surrounds a potential transaction between Rio Tinto and major shareholder Chinalco, China's state-backed aluminium group, valued in excess of US$15 billion (A$22.86 billion).
In other headlines, building products maker Boral says lower interest rates and government spending will not help its housing materials business until mid-2009.
Shares in Boral were steady at $3.08.
PMP Ltd is overhauling its struggling print business after posting an $11.1 million loss in the first half, sending its shares 7.5 cents, or 19.23 per cent, lower to 31.5 cents.
Gloves and condom maker Ansell has downgraded its full year earnings per share guidance for 2008/09, saying it cannot avoid the impact of the global economic downturn.
Ansell shares fell 23 cents, or 2.41 per cent, to $9.32.
Energy stocks were mixed. Woodside dropped six cents to $32.30, Santos was steady at $14.55 and Oil Search appreciated nine cents to $4.65.
The spot price of gold in Sydney at 1622 AEDT was US$911.00 an ounce, up $15.75 on Tuesday's local close of US$895.25.
The gold miners were mixed. Newcrest advanced 35 cents to $32.35, Newmont was steady at $6.10 and Lihir Gold dipped four cents to $3.15.
Among retail stocks, Woolworths inched one cent lower to $27.63, Coles owner Wesfarmers lost eight cents to $15.20, Harvey Norman put on three cents to $2.03, David Jones shed four cents to $2.22 and JB Hi-Fi gave up some of Tuesday's gains, retreating 50 cents, or 4.63 per cent, to $10.30.
Media stocks were largely weaker. Fairfax was up one cent at $1.14, Consolidated Media lost 3.5 cents to $1.78, News Corp slumped 19 cents to $10.76 and its non-voting scrip was down 21 cents to $9.79.
The top traded stock was pharmaceutical company Pharmaust with 41.67 million shares worth $833,500 changing hands.
Pharmaust shares were steady at two cents.
Preliminary market turnover was 963.1 million shares worth $2.96 billion, with 334 stocks up, 491 down and 285 unchanged.
- AAP
