Steep drop on Goldman fraud woes

News of a civil lawsuit against Goldman Sachs rocks markets with the DJIA down 1.1 per cent and the S&P 1.6 per cent.

Close Australian shares fell to their lowest level in more than two weeks, as investors dumped shares across markets after US fraud charges against Goldman Sachs.

Investors also took profits amid concerns surrounding the Europe-wide flight ban arising from the ash cloud spreading from Iceland’s Eyjafjoell volcano.

At the close, the benchmark S&P/ASX200 index was down 69.6 points, or 1.4 per cent, at 4915.1, while the broader All Ordinaries Index fell 67.9 points, or 1.4 per cent, to 4939.4.

Among the sectors, materials slumped 1.9 per cent, financials dropped 1.5 per cent and energy shares lost 1.3 per cent.

need2know:
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- Gold hovers around $US1136
- Dow futures are 126 points lower at 10,951

‘‘The key driver here was the news out of New York on Friday that the SEC (US Securities and Exchange Commission) will be bringing civil charges against Goldman Sachs,” City Index market strategist Michael McCarthy said. ‘‘Perhaps we are seeing some concerns around the European volcanic haze.’’

Mr McCarthy said the sell-off of local financial stocks and airlines appeared to be based more on sentiment and the moderation of investors’ recent strong appetite for risk.

‘‘It just goes to show how vulnerable markets remain to panic selling,’’ he said.

Macquarie takes big hit

Investment bank Macquarie took one of the heaviest hit among the biggest stocks, falling 2.6 per cent to $50.25, its lowest close in a week.

Among the major banks, ANZ was off 61 cents at $25.08 after completing the acquisition of The Royal Bank of Scotland’s Taiwan businesses. National Australia Bank backtracked 29 cents to $28.08, Commonwealth Bank retreated 73 cents to $59.10 and Westpac surrendered 42 cents to $27.76.

In the resources sector, global miner BHP Billiton was 70 cents poorer at $42.84, and Rio Tinto dumped $1.71 to $77.96.

Macarthur Coal was steady at $16.54 after its largest shareholder said it still did not have enough information to decide whether to back a takeover bid for the collier by US coal giant Peabody Energy.

Kimberley Metals firmed 1.5 cents to 26 cents after China’s largest lead producer agreed to buy a 15 per cent stake in Kimberley Metals.

Oil and gas producer Woodside Petroleum shed 75 cents to $45.97 and Santos reversed 33 cents to $14.09.

Flight delays hit Qantas

National carrier Qantas said it was losing up to $1.5 million a day because of the european flight disruptions. Its shares descended 6 cents to $2.92 and budget airline operator Virgin Blue lost 3 cents to 62.5 cents.

In the media sector, Seven Network was 4 cents lower at $7.74 after its merger with Kerry Stokes’ privately owned Caterpillar products dealer WesTrac was likely to get the nod from the broadcaster’s shareholders at a meeting in Sydney.

News Corp was 27 cents higher at $19.58 and its non-voting stock was up 22 cents at $16.97. Consolidated Media dipped two cents to $3.10 and Fairfax sagged 1.5 cents to $1.745.

Telco Telstra scraped off 1 cent at $3.12 and Optus-owner Singapore Telecommunications nudged up 1 cent to $2.43.

Retailer Woolworths worsened 6 cents to $27.22 and Wesfarmers, which owns Coles, eased 53 cents to $31.86.

In the gold sector, Lihir was off 2 cents at $3.96 and Newcrest was 61 cents weaker at $34.00.

Among other stocks, beef producer Australian Agricultural Company was 1.5 cents lower at $1.415 after it said it would become a bigger exporter of live cattle as part of moves to return the company to profitability.

The top-traded stock by volume was Samson Oil & Gas, with 237.8 million shares worth $9.72 million changing hands. Samson Oil &nd Gas was 0.9 cents higher at 4.3 cents.

Preliminary national turnover was 2.43 billion shares worth $4.73 billion, with 814 stocks down, 320 up and 334 unchanged.

AAP, with BusinessDay