Australian shares dip to four-year low

28 Oct, 2008

Australian shares slid 1.6 percent to a fresh four-year low on Monday as investors across the region continued to focus on the prospect of a global recession. The benchmark S&P/ASX 200 index lost 60.2 points to close unofficially at 3,809.2, its lowest close since October 29 2004, and the fourth straight day of declines.
Gains by the big miners helped to offset steeper losses among the banks, while some discretionary retail stocks suffered on predictions by Merrill Lynch of a consumer recession in 2009. Analysts said sentiment remained fragile and investors were waiting to see further government interventions to stabilise markets. "It's hard to know what's going to turn it," said Brent Mitchell, research manager at Shaw Stockbroking.
"You say there's great value, but who's not to say there isn't going to be better value tomorrow?" One consolation for exporters was the slump in the Aussie dollar, which lost another 5 cents in overnight trade and remained about 3 cents weaker on the day despite two rounds of central bank intervention.
"The longer the Aussie dollar stays down where it is, the better it looks for some company's earnings. In some cases it'll paper over the poor trading conditions," Mitchell said, pointing to companies like packaging group Amcor Ltd and paper maker PaperlinX Ltd. The New Zealand market was closed for a public holiday.
Three of the top four banks - National Australia Bank Ltd, Westpac Banking Corp and Australia and New Zealand Banking Group Ltd - lost more than 3 percent, while Commonwealth Bank of Australia finished down 2.0 percent. BHP Billiton, the world's biggest diversified miner, rose 0.9 percent to A$24.60, while its take-over target, Rio Tinto, rose 0.9 percent to A$64.65. Brokers said there was no particular news driving the two higher.
Health insurer NIB Holdings jumped 13.9 percent to A$0.74 after it said it had rejected an incomplete take-over proposal worth around A$1.15-A$1.20 a share, or up to A$621 million ($383 million), as too cheap.

Read Comments