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PERTH - A rate cut by the central bank failed to stem falls on the Australian share market, which closed four per cent lower after taking its cue from weaker global bourses.
The benchmark S&P/ASX200 index was down 153 points, or 4.16 per cent, at 3,528.2, while the
broader All Ordinaries index shed 145.6 points, or 4.02 per cent, to 3,473.4.
On the Sydney Futures Exchange at 1618 AEDT, the December share price index contract was down 145 points at 3,536 on a volume of 36,147 contracts.
CommSec market analyst Juliette Saly said the local bourse opened firmly in the red after heavy falls on Wall Street overnight as US investors made off with profits following last week's rally.
Australians woke to news the US economy has been in recession since December 2007.
"Today's one per cent interest rate cut (by the Reserve Bank of Australia) didn't do anything to boost the market, which actually fell further into the red from where we were ahead of the rate decision," Ms Saly said.
"We've lost a fair bit of that momentum that we gained towards the end of last week, but certainly not dipping near that level of 3,200 points, which we touched about a fortnight ago."
Commonwealth Bank and National Australia Bank were the first to pass on the rate cut by the full percentage point decrease. Westpec cut its rates by 0.8 of a percentage point.
Commonwealth Bank slumped $1.75, or 5.3 per cent, to $31.25, NAB fell 71 cents, or 3.65 per cent, to $18.72, ANZ declined 43 cents, or 2.99 per cent, to $13.95 and Westpac was down 84 cents, or 4.96 per cent, at $16.10.
Ms Saly said the mining sector weighed heavily on the domestic market after a huge fall in commodity prices overnight.
BHP Billiton shares plunged $2.87, or 9.6 per cent, to $27.03 and its rival Rio Tinto sunk $3.70, or 8.67 per cent, to $39.00.
"Fortescue Metals Group had an interesting day, starting in the red then rallied on more takeover speculation involving potentially BHP or a Chinese firm," Ms Saly said.
Fortescue's shares were steady at $2.50 on heavy trading volumes.
Ms Saly said retail stocks were mixed, with upmarket department store chain David Jones up 13 cents to $2.70 and furniture retailer Nick Scali steady at 50 cents.
Woolworths lost 40 cents to $26.90, Wesfarmers fell $1.04, or 5.49 per cent, to $17.90 and Harvey Norman slipped two cents to $2.13 after reporting that written sales for the four weeks ended November 30 rose by half a per cent, up from the same period last year.
At 1623 AEDT, spot gold in Sydney was trading at US$771.60 an ounce, down US$41.10 on Monday's Sydney close of US$812.70.
Among gold miners, Newcrest dipped eight cents to $25.76, Newmont dropped 36 cents, or 7.19 per cent, to $4.65 after going ex dividend and Lihir Gold inched two cents higher to $2.30.
Making headlines today, Waratah Coal has accepted a revised $125 million takeover offer from Mineralogy Pty Ltd, which is owned by billionaire Clive Palmer.
Waratah's shares jumped 40 cents, or 30.77 per cent, to $1.70.
Market analysts say the biggest challenge facing agribusiness and automotive parts supplier Futuris Corporation during its restructure will be exiting its non-core assets.
Shares in Futuris were down 2.5 cents to 76 cents.
Oil and gas minnow incremental Petroleum says it will soon respond to an $83.7 million takeover bid by its joint venture partner in Turkey, Texan oil explorer TransAtlantic Petroleum Corporation.
Shares in Incremental were down half a cent to 99.5 cents.
Among media stocks, Fairfax gave up 4.5 cents to $1.38, News Corp slid 33 cents, or 2.73 per cent, to $11.77 and its non-voting scrip retreated 60 cents, or 5.11 per cent, to $11.15.
Ms Saly said telco Telstra performed well because it was a defensive stock, gaining nine cents, or 2.22 per cent, to $4.14.
The most traded stock was Babcock & Brown Infrastructure, with 43.89 million shares changing hands worth $3.75 million.
Its shares inched one cent, or 10.53 per cent, lower to 8.5 cents.
Preliminary market turnover was 1.08 billion shares, valued at $3.63 billion, with 249 stocks up, 665 down and 266 unchanged.
- AAP
