Finance Finance News Brexit fears take toll on Australian share market

Brexit fears take toll on Australian share market

The stock market fell sharply.
The market fell on Friday after the US rate decision. Photo:AAP
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The share market has posted its biggest fall in four months, as investors dumped stocks amid fears Britons will vote to exit the European Union in 10 days.

Australian shares slumped to a seven-week low, wiping out more than $30 billion.

Traders are also awaiting the outcome of key policy meetings of the US Federal Reserve and the Bank of Japan later this week.

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Stocks dropped at the open and kept falling through the session, with every sector in the red.

By the close, the All Ordinaries Index tumbled by 109 points to close at 5283 while the ASX 200 dropped 2.1 per cent to finish on 5203.

The ASX fell to a seven-week low. Photo: Getty

Energy stocks had the biggest losses, as oil prices fell in Asian trading, adding to overnight losses.

Oil and gas producer Santos lost 7 per cent to $4.39.

The healthcare sector was also sold.

Stem cell drug maker Mesoblast had the biggest losses on the ASX 200 after the Israeli firm Teva Pharmaceutical abandoned its rights to the firm’s experimental heart failure therapy.

Mesoblast shares had been in a trading halt for two weeks and on their first day of trade closed down more than 42 per cent at $1.11.

CMC chief market analyst Michael McCarthy said $26.7 billion of value had been destroyed on Tuesday and he predicts further falls after the market broke through a key technical barrier.

“We’ve seen the market plummet and it does look like, at least from a technical point of view, we could have further falls to make over the coming sessions.”

Oil prices, spot gold down, dollar steady

Elsewhere, bank stocks were also out of favour; with the big four lenders all losing more than 2 per cent.

NAB fared the best, down 2.3 per cent to $25.47.

Investors are selling out over Brexit uncertainty. Photo: Getty

In economic news, NAB’s latest business survey has found business confidence deteriorated last month, despite the Reserve Bank cutting interest rates for the first time in a year.

Confidence remained weaker than average, falling to a reading of three, but business conditions remained buoyant, at a reading of 10.

In currencies, the dollar was steady against the greenback but was strong against a weaker British pound, which has taken a hit on Brexit fears.

About 5pm AEST it was buying 78.8 US cents, 65.6 euro cents, 78 Japanese yen and 52.2 British pence.

Oil prices were down again, adding to overnight losses, with Brent crude losing nearly 1 per cent to $US49.92 a barrel.

Spot gold slipped after rising overnight and was fetching $US1,279 an ounce.


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