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MELBOURNE - The Australian share market dropped more than 1.5 per cent after heavy losses from the financials as US investment bank Lehman Brothers filed for bankruptcy.
At the close, the benchmark S&P/ASX200 index was 86.1 points, or 1.76 per cent, lower at 4817.7, while the broader All
Ordinaries lost 82.1 points, or 1.66 per cent to 4875.
At 1615 AEST on the Sydney Futures Exchange, the September share price index contract was 99 points lower at 4826, on a volume of 104,884 contracts.
Lehman filed for bankruptcy after efforts to find a buyer for the bank collapsed following an estimated US$3.9 billion loss in its fiscal third quarter amid writedowns on mortgage assets.
"It is all being driven by the financial sector, mainly on the back of the news from the US," CMC Markets senior dealer Dominic Vaughan said.
"It is a continuation of the Lehman's meltdown - Merrill, Bank of America, AIG, it's pretty nasty out there."
Commonwealth Bank shed $1.01 to $41.98, ANZ lost 38 cents to $16.87, National Australia Bank fell $1.14 to $22.82, Westpac dropped 37 cents to $23.15 and Macquarie Group gave up $4.55 to $39.46.
Babcock & Brown dropped 32 cents, or 16.84 per cent to $1.58 after former chief executive Phil Green resigned as a non-executive director of the company.
The market got off to a poor start following a weak lead from Wall Street, with the Dow Jones Industrial Average losing 11.72 points, or 0.1 per cent to 11421.99.
The retailers were mixed, with Woolworths gaining 15 cents to $28.13, Wesfarmers losing 75 cents to $29.45, David Jones shedding 22 cents to $3.91, and Harvey Norman falling seven cents to $3.56.
Shopping centre asset manager Centro Properties Group lost 3.3 cents to 7.2 cents after the company said the would-be acquirer of the bulk of its Centro America Fund assets has decided not to proceed with the US$714 million transaction.
The media sector was mixed, with Fairfax gaining one cent to $2.90, Consolidated Media Holdings falling nine cents to $3.10, News Corp dropping 87 cents to $16.88 and its non-voting shares shedding 91 cents to $16.54.
The energy sector was mixed, with Oil Search adding 33 cents to $5.95, Woodside giving up 61 cents to $52.00, Santos losing 57 cents to $18.80.
The big miners were stronger, with BHP Billiton gaining five cents to $36.05 and Rio Tinto adding 18 cents to $106.43.
The spot price of gold was higher and at 1622 AEST was trading at US$781.50 an ounce, up US$26.30 from Friday's local close of US$755.20 an ounce.
The gold miners were stronger, with Newcrest Mining gaining $1.60 to $21.10, Lihir adding 23.5 cents to $2.05 and Newmont putting on 31 cents to $4.95.
OZ Minerals was the most traded stock on the market, with 74.56 million shares changing hands, collectively worth $107.66 million.
The zinc and copper miner added 9.5 cents to close at $1.445.
Preliminary market turnover reached 1.13 billion, worth $4.97 billion, with 283 stocks moving up, 812 moving down and 285 unchanged.
- AAP