Australian stocks close down 1.01pc

SYDNEY: Australian stocks closed down 1.01 percent Tuesday as European sovereign debt concerns were stoked by a downgrade of Italy's credit rating.

The benchmark S&P/ASX 200 closed down 41.3 points at 4,040.2, following negative overnight leads from overseas. The broader All Ordinaries index shed 39.3 points, or 0.94 percent, to close at 4,124.8.

The Australian dollar continued its slide on news that Standard & Poor's had downgraded Italy.

It was trading at 101.93 US cents, down from its 102.45 US cents close on Monday.

"If the negative leads from Wall Street and European markets weren't enough to send us lower, the S&P downgrade to Italy's credit rating certainly was," IG Markets Ben Potter said.

"It's just another piece of bad news that's been added to the pile of junk that's plaguing Europe."

Copyright AFP (Agence France-Presse), 2011