Australian stocks slide on US rescue delay

September 30th, 2008 - 10:51 am ICT by IANS  

Sydney, Sep 30 (DPA) Australian stocks slid 3.8 percent Tuesday on news that the US Congress had voted down the long-awaited bail-out package for Wall Street.The ASX200 slipped 186 points, or 4.8 percent, in the first hour of trading to 4,620. The index plunged more than 5 percent at the opening bell, but bargain hunting later lifted the market off its lows.

Shares fell across the board, with resources stocks worst hit amid fears that the crisis will affect the wider economy and crimp global growth.

“Resources are very weak,” said Lucy Burke of brokerage Goldman Sachs JB Were. “Fears of a global slowdown continue to hurt the sector.”

BHP Billiton Ltd was down 7.5 percent, and fellow mining giant Rio Tinto Ltd was off 9 percent.

Australian Prime Minister Kevin Rudd, who appealed for the US Congress to have another try at reaching agreement on the proposed bailout, said that the Australia banking system was holding up well.

“These events don’t change the fundamental strength of the banking system,” Rudd told reporters. “But, of course, these developments do prolong the liquidity problems we’ve been having for some time.”

Analysts noted that the stock market has had much worse days. On January 22 the Australian market shed 7.3 percent, and in the 1987 financial crisis the one-day slide was 25 percent.

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