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SYDNEY - The Australian share market ended deep into the red, with jittery investors today pulling back after a higher than expected inflation figures fanned fresh worries about higher interest rates.
At the 1615 AEST close, just a day after setting a fresh record high of 6422.3, the benchmark S&P/ASX200 index tumbled 81.8 points to 6,340.5.
The All Ordinaries dumped 77.5 points to 6,378.
On the Sydney Futures Exchange, the September share price index contract lost 83 points to 6332 on a volume of 21,957 contracts, according to preliminary figures.
Aequs Securities institutional dealer Ric Klusman said the local bourse was the weakest of all Asia-Pacific markets today.
"We are about one per cent down ... and we probably were looking at coming back a long way this morning when the inflation figures came out and scared the market a bit," he said.
"The miners are taking the brunt of it."
The headline consumer price index (CPI) rose by 1.2 per cent in the June quarter, for an annual rate of 2.1 per cent, the Australian Bureau of Statistics (ABS) said.
Market economists had expected the headline CPI to rise by 1.0 per cent in the June quarter for an annual rate of 1.9 per cent.
Economists agreed the Reserve Bank has been given a push toward raising rates.
"It's making it much more likely that we get an interest rate increase and possibly in August," Grange Securities research director Stephen Roberts said.
In the resources sector was hurting on mixed metals prices out on London last night with BHP Billiton down 73 cents to A$38.05, while rival Rio Tinto was A$2.30 lower at A$97.20.
Potential takeover target aluminium producer Alumina Ltd fell 56 cents, or 6.67 per cent, at A$7.59.
The company is anticipating underlying earnings of A$490 million for fiscal 2007, lower than many analysts had expected, which is a significant step back from its 2006 result as the stronger Australian dollar bites into earnings.
Local markets started off on shaky ground as US stocks took a hammering overnight after poor profit results from lender Countrywide Financial intensified worries over the housing and sub-prime mortgage market.
The Dow Jones industrial average fell 226.47 points, or 1.62 per cent, to 13,716.95.
The Standard & Poor's 500 Index was down 30.53 points, or 1.98 per cent, to 1,511.04 and the Nasdaq Composite Index lost 50.72 points, or 1.89 per cent to 2,639.86.
The price of gold in Sydney at 1629 AEST was US$681.60 per fine ounce, down US$0.30 on yesterday's close.
In the gold sector, Newcrest Mining added two cents to A$26.09, Newmont Mining gained four cents at A$4.94, but Sino Gold Mining dipped 12 cents to A$6.38 and Lihir Gold Ltd shed six cents at A$3.13.
In energy, Oil and gas producer Woodside Petroleum was 28 cents lower at A$44.90, and Santos reversed 25 cents to A$13.78.
Oil Search shed 14 cents to A$3.98.
All the major banks were lower, with National Australia Bank falling 62 cents to A$40.00, Westpac was 33 cents cheaper at A$26.47, ANZ lost 24 at A$29.15 and Commonwealth Bank was 22 cents lower at A$56.50.
Retailer Coles Group was 29 cents down at A$14.85 and Woolworths fell 23 cents to A$27.45, while upmarket department store David Jones lost 12 cents to A$5.60.
In the media sector, News Corp was down 39 cents to A$27.21 while its non-voting stock retreated 41 cents to A$25.24.
Publishing and Broadcasting surrendered 41 cents to A$18.75 but Fairfax found six cents at A$4.89.
Despite the today's bloodshed, there were some bright spots on the market, said Mr Klusman.
"There are bright spots out there, the mass selling of Brambles (Ltd) has finished and it's up nine cents (at A$11.17) today but everyone is waiting on the US tonight, where the futures are indicating the Dow will be up about 30 to 40 points tonight," he said.
IT company Data3 Ltd shares ended up 36 cents at A$6.31 after upgrading its 2007 guidance.
Data3 forecast earnings before tax of A$9.9 million for fiscal 2007, up 27 per cent on the previous corresponding year.
Troubled winemaker Evans & Tate Ltd has received another merger proposal from the Yarraman wine group, but another suitor, Ferngrove Vineyards Ltd, has withdrawn its merger offer.
ETW shares were flat at 15 cents.
Australia's biggest property developer, Lend Lease Corp, jumped 36 cents at A$19.06 after announcing it had won a A3;1.5 billion (AA$3.50 billion) project to revive London's Elephant and Castle area.
The top-traded stock by volume was oil and gas explorer Lakes Oil, with 98 million shares worth A$1.74 million changing hands.
Lakes Oil was flat cents at 1.4 cents.
Preliminary national turnover was 1.92 billion shares worth A$5.86 billion, with 440 stocks up, 829 down and 342 unchanged.
- AAP