Australian share prices dropped 2.0 percent on Monday ahead of a vote by US lawmakers on a bailout package for Wall Street costing 700 billion US dollars. The benchmark S&P/ASX 200 slipped 97.4 points to close at 4,807.4 while the broader All Ordinaries was down 95.4 points at 4,839.2.
Turnover was a light 974.5 million shares worth 3.43 billion Australian dollars (2.82 billion US), with 356 stocks closing up, 617 down and 299 unchanged. The market opened almost one percent higher after reports from the United States said that an agreement had been reached on Washington's proposal to buy up toxic mortgage-related assets.
But dealers said losses in the resources sector weighed on the market as investors waited to hear whether the US rescue package would be passed into law. "Metal prices were down Friday night and we've seen that flow through to weaker performances here in the big miners and mining related stocks," Macquarie Private Wealth private client adviser Helen Spencer said.
Stock in mining giant BHP Billiton lost 4.5 percent to 34.24 dollars while rival and take-over target Rio Tinto dropped 5.5 percent to 95.50. The major banks were also lower. ANZ fell 1.1 percent to 18.79, Commonwealth Bank lost 1.3 percent to 43.87, National Australia Bank shed 0.4 percent to 25.69 and Westpac was down 3.5 percent at 23.15.
Dealers said the market was also concerned about European banks after Belgium, Holland and Luxembourg rescued Fortis with a 11.2 billion euro bailout and the British government said it was nationalising Bradford and Bingley.