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MELBOURNE - The Australian share market fell nearly seven per cent today as investors feared the troubled US economy and global credit crisis would drag the world into recession.
Resources stocks were pulverised on the back of lower commodity prices and an expectation that demand for commodities would fall further.
At the 1615 AEDT close, the benchmark S&P/ASX200 index was down 286.6 points, or 6.67 per cent, at 4,013.4, while the broader All Ordinaries index fell 284.4 points, or 6.66 per cent, to 3988.1.
These falls, the biggest since Friday, wiped about $86 billion in value from the market.
On the Sydney Futures Exchange, the December share price index futures contract was 351 points lower at 4034, on a volume of 45,209 contracts, according to preliminary calculations.
CMC Markets head of trading James Foulsham said today's trading was "another shocker across the board".
"It's fear of global recession and commodity prices as well," he said.
"Most notable was BHP Billiton and Rio Tinto.
"Rio's been smashed, BHP's been smashed - we saw a sell-off of commodities last night, and that's really spooked the market here."
Mr Foulsham said that after the strong rises in the market earlier this week, investors had come back to earth today with a thud.
Investors were concerned a slowdown in the US economy would impact the economy of China, which has large exports to the US.
In the resources sector, BHP Billiton lost $3.90, or 13.13 per cent, at $25.80, and Rio Tinto dropped $12.49, or 15.91 per cent, to $66.01.
Macarthur Coal lost 94 cents, or 13.74 per cent, to $5.90 as it forecast a profit of up to $160 million in the half year to the end of December 2008.
Iluka Resources, the world's biggest zircon producer, dipped three cents to $3.83 as it said it expects strong sales this quarter after delivering a drop in production during the third quarter.
Oil and gas producer Woodside Petroleum was off $2.15 at $37.00 as it reiterated its 2008 production forecast after delivering an 84 per cent increase in revenue for the third quarter.
Santos shed $2.00 to $10.90.
Despair over the US economy sent Wall Street plunging again overnight, propelling the Dow Jones Industrial Average down 7.9 per cent to 8,577.91 points - its second-largest points loss ever.
Stocks fell on disheartening economic data, including a big drop in retail sales and a Federal Reserve report that said tight credit conditions are hurting businesses across the US.
US Federal Reserve chairman Ben Bernanke warned that patching up the credit markets will not provide an instantaneous jolt to the economy.
In the banking sector, National Australia Bank dumped $1.02 to $22.70 as it said it expects full-year cash earnings to be around $3.9 billion.
Westpac weakened 70 cents to $22.00, Commonwealth Bank retreated $1.35 to $42.40, and ANZ surrendered 87 cents to $17.33.
Among media stocks, broadcaster Ten Network sagged 23 cents to $1.16 as it said it was positioned to weather the current difficult cycle after its fiscal 2008 results were affected by an advertising market slowdown.
News Corp was $1.00 poorer at $13.55, and its non-voting scrip fell 97 cents to $13.30.
Consolidated Media was 31.5 cents lighter at $1.985, and Fairfax offloaded 16 cents to $2.05.
Among the retailers, supermarket giant Woolworths gave away 39 cents to $26.00 as it said it would no longer seek leave to appeal a New Zealand Supreme Court decision hindering its bid to takeover Kiwi discount retailer The Warehouse Group.
Wesfarmers, which owns Coles, jettisoned $2.57 to $20.11.
Telco Telstra backtracked 15 cents to $3.92, and Singapore Telecommunications lost 17 cents to $2.53.
In the gold sector, Lihir was down 17 cents at $2.08, Newcrest lost 77 cents at $24.24, and Newmont reversed nine cents to $4.52.
The price of gold in Sydney at 1641 AEDT was US$840.95 per fine ounce, down US$4.50 on yesterday's close of US$845.45.
The top-traded stock by volume was Telstra, with 44.06 million shares worth $174.62 million shares changing hands.
Preliminary national turnover was 1.29 billion shares worth $4.73 billion, with 992 stocks down, 147 up and 228 unchanged.
- AAP
