PERTH: The Australian sharemarket has plunged below the key 5000-point level amid a sharp sell-off in resources stocks following a global rout which sent US and European markets down as much as 3 per cent.
The weakest Chinese industrial profits in four years sparked fresh bearish moves on commodities markets overnight, causing investors to shed resources stocks on the local market and pushing Asian bourses deeply lower.
Mining and energy stocks dropped following a savaging of Glencore stock on the London exchange overnight which pushed the shares to a record low and wiped 30 per cent off the market value of one of the largest commodity companies in the world.
At 12.10pm, the ASX 200 index had slumped 135.1 points, or 2.64 per cent, to 4978.4 points, while the broader All Ordinaries had lost 130.5 points, or 2.54 per cent, to 5014.6.
“It is fruitless for investors to search for fundamental economic reasons to explain market positioning at present,” Rivkin chief executive Scott Schuberg said.
The Glencore sell-off came at a time when the market was concerned that the company’s debt wasn’t being addressed at an appropriate pace, given the uncertainty of future commodity prices, Mr Schuberg said.
Official data yesterday showed China’s industrial companies profits fell 8.8 per cent last month from a year ago, hit by August’s shock yuan devaluation, weak demand and plunging share prices. It’s the worst monthly fall in more than four years for industrial profits.
