KEY POINTS:
The Australian stock market closed sharply lower today as more fallout from the subprime mortgage crisis in the United States spooked investors.
ABN Amro Morgans director of equities Bill Chatterton said lower base metals prices helped pull down the major miners, but the nervousness from the latest development in the US subprime mortgage crisis affected stocks more broadly.
It emerged today that New York-based bank Citigroup Inc will provide emergency support to seven structured investment vehicles (SIVs) with investments totalling US$49 billion (A$56.11 billion).
SIVs sell short-term debt to buy longer-term, higher-yielding assets.
The SIVs were shut out of the short-term market as losses on subprime mortgage securities prompted investors to avoid securities considered risky.
"I suspect it (the market fall today) is a follow-on from subprime because that kind of knocks the market and everyone says we'll take some money off the market," Mr Chatterton said.
"And that kind of goes across the market, not just out of financials (banks). So that's what I think we're probably seeing this afternoon."
At the 1615 AEDT close, the benchmark S&P/ASX200 index was down 105.9 points to 6491.7, while the All Ordinaries shed 105.0 points to 6556.1.
On the Sydney Futures Exchange, the December share price index contract dropped 111 points to 6489 on a volume of 41,386 contracts, according to preliminary figures.
On Wall Street overnight, the Dow Jones Industrial Average was up 44.06 points to 13,517.96.
In the resources sector on the local market today, BHP Billiton fell $1.21 to $42.05, and Rio Tinto lost $3.96 to $137.24.
Oil and gas producer Woodside Petroleum was off 24 cents at $47.61, and Santos retreated 25 cents to $14.17.
Oil refiner Caltex Australia dumped $1.31 to $20.10 as a weaker Australian dollar and unexpected refinery shutdowns it to downgrade its earnings forecast by as much as eight per cent.
Among the major banks, National Australia Bank fell 73 cents to $38.45, ANZ sagged 32 cents to $27.60, Westpac backtracked 48 cents to $29.00, but Commonwealth Bank added 12 cents to $60.74.
Stock Move Price AMP - 0.070 10.100 ANZ Bank - 0.320 27.600 BHPBilton - 1.210 42.050 CBA +0.120 60.740 NAB - 0.730 38.450 NewsCorp - 0.080 24.280 Rio Tinto - 3.960 137.240 TelstraCp - 0.010 4.710 WestpacBk - 0.480 29.000 Woolwrths - 0.020 34.660
In the gold sector, Newmont eased nine cents to $5.55, Newcrest fell $1.22 to $33.25, and Lihir retreated 25 cents to $3.47.
The price of gold in Sydney at 1632 AEDT was US$801.75 per fine ounce, down US$9.00 on yesterday's close of US$810.75 per fine ounce.
In the media sector, News Corp slipped eight cents to $24.28, and its non-voting scrip nudged up one cent to $23.35.
Consolidated Media Holdings was off eight cents at $4.63 and Fairfax gave away five cents to $4.75.
Telco Telstra scraped off one cent to $4.71, and Optus owner Singapore Telecommunications lost two cents at $3.05.
Retailer Woolworths was down two cents at $34.66, and David Jones descended four cents to $5.29.
Among other stocks, Straits Resources fell 31 cents to $6.30 after closing out its hedge book for the Tritton mine in New South Wales at a cost of US$53.5 million (A$61.26 million).
Hedge fund manager HFA Holdings firmed one cent to $2.18 as it said it was confident of maintaining steady growth despite acknowledging that global market volatility presented it with challenges.
Property developer and fund manager Charter Hall was down 15 cents at $2.50 as it won the right to negotiate to buy television broadcaster Nine Network's headquarters in Sydney and Melbourne.
Junior nickel explorer White Cliff Nickel finished its first day of trading on the stock exchenge at 25 cents, in line with its issue price.
Another market debutant, explorer Macquarie Harbour Mining, closed at 22 cents - a modest two cent premium to its issue price of 20 cents.
The top-traded stock by volume was Flinders Diamonds, with 180.6 million shares worth $17.5 milion changing hands. Flinders was down 0.8 cents at nine cents.
Preliminary national turnover was 1.68 billion shares worth $6.64 billion, with 883 stocks down, 401 up and 334 unchanged.
- AAP