Australian shares sag on growth concerns

Australian share prices closed sharply lower on Monday as investors reacted to a negative lead from Wall Street and weakness on Asian markets fuelled by concerns about global growth prospects, dealers said. They said that while growth concerns have been highlighted as influencing sentiment, many investors had been anticipating a correction after a strong, record-breaking market run extending over two years.
The benchmark SP/ASX 200 closed down 54.9 points or 1.4 percent at 3,959.4 while the broader All Ordinaries index finished down 56.7 points at 3,936.5.
Turnover was 1.08 billion shares worth 3.7 billion dollars (2.7 billion US), with 963 stocks down, 175 up and 230 steady.
The market has now fallen about seven percent from record highs reached on March 21 despite the lack of major changes in earnings outlooks for key sectors including resources and banking.
Dealers said there had been fears that share prices, particularly in the resources sector, had run ahead of market reality even though price earnings ratios or valuations for many mining and oil stocks remain unchallenging.
Nevertheless, they said, there has been a re-focus by investors who have been rotating out of the high growth, potentially overvalued stocks, into more defensive companies.
The banking, the health care, infrastructure and the telecommunications sectors are expected to perform better than others in the current market climate.
Commsec equities analyst Donahue D'Souza said that in his firm's view it is too early to move to defensive positions, pointing out that economic growth in the United States and China remained solid.
BHP closed down 0.26 at 16.40 dollars while Rio Tinto fell 0.46 at 42.65.
BHP's take-over target WMC Resources shed 0.03 at 7.86, just above the recommended offer price of 7.85.
News Corp lost 0.20 at 21.36 dollars while its non-voting shares fell 0.22 to 20.63.
Telstra lost 0.08 to 4.96 dollars while SingTel eased 0.03 to 1.97.
National Australia Bank fell 0.39 to 28.36 dollars, Commonwealth Bank shed 0.07 to 35.40, ANZ was off 0.13 at 20.64 and Westpac down 0.31 to 18.53.