PERTH: The Australian market has declined at the open, with BHP Billiton leading resources stocks down in the wake of a weak Wall Street lead and another sharp fall in global oil prices.
At the 10.15am (AEDT) official market open, the benchmark S&P/ASX200 index fell 88.3 points, or 1.72 per cent, to 5037.4 points, while the broader All Ordinaries lost 83.7 points, or 1.62 per cent, to 5098.5 points.
BHP Billiton dropped sharply again as the fallout from the Brazilian dam burst continued, down 3.25 per cent to $19.94 at the open. IG market strategist Evan Lucas said the stock had not been under $20 since November 2008.
And after falling about 3 per cent ahead of yesterday’s Australian market open, global oil prices fell around that level again overnight with US West Texas Intermediate dropping to $US41.75, the lowest level in more than two months.
Mr Lucas said the recent oil declines had seen Canada’s Toronto Stock Exchange emerge as a leading indicator for Australia’s resources-exposed sharemarket.
“It’s down 3.5 per cent in the past seven days and is on track for eight consecutive trading day losses as oil is belted and US rate rise hit Canada’s equity plays,” he said, adding the TSX lost 1.4 per cent overnight.
Elsewhere overnight, several US Federal Reserve officials hinted at a sooner-rather-than-later return to rate rises while Europe’s central bank chief Mario Draghi said the ECB was ready to expand its bond-buying program amid inflation concerns.
In equities news, property developer Lend Lease said it was eyeing leading indicators in the market for signs of change but that activity was still strong. Nine Entertainment board member and Apollo Management representative Kevin Crowe has resigned from the board in the wake of the hedge fund selling down its stake in the entertainment company while Virgin Australia has appointed Geoff Smith as chief financial officer.
