No sector was spared with the local bourse posting its biggest fall so far this year.
The S&P-ASX 200 index plunged as low as 3515.1 points before recovering slightly to close at 3529.5 points, down 4.3%, while the All Ordinaries closed at 3476.8 points, down 4%.
Today’s carnage came after a shocker on Wall Street where the Dow Jones Industrial Average ended 2.9% lower on a 2.7% plunge in December United States retail sales, more than double the 1.2% decline economists anticipated, and on Federal Reserve comments that the US economy would continue to weaken.
Closer to home, Rio Tinto and BHP Billiton led the charge into the red on weaker base metal prices as speculation mounts that demand for commodities will weaken in a deepening global recession.
Rio fell as low as $36.36, down 10.5%, before recovering to $37.30 at market close, while BHP ended the session at $28.90, down 6.6% after earlier dipping to $28.79.
In some positive news for a change, Rio reported a 6% on-year jump in iron ore production to 153.4 million tonnes in 2008, which was in line with guidance.
However, the good new didn’t last long with fourth quarter iron ore output dipping 18% on-year to 31.8Mt on the back of a cut to production in response to a slowdown in demand.
Analysts at Macquarie Research have estimated an almost 30% year-on-year fall in stainless steel output for the fourth quarter of 2008, while a Nikkei report is tipping stainless steel output to fall 40-60% in Japan in the first quarter 2009.
Base metals fell on the London Metal Exchange with three-month nickel falling almost 4% to $US10,850 per tonne while zinc dropped 3.5% to $1263/t and copper shed 2.5% to $3286/t.
Spot gold was trading at $US809.7 an ounce at 3:55pm EDT, down 0.1%. The bulk of gold plays followed suit – Newcrest Mining down 5.8% to $A28.25, Lihir Gold down 4% to $2.55 and Sino Gold down 3.3% to $4.40.
In other resource news, Atlas Iron reported a maiden JORC resource estimate for its Anson deposit at Wodgina in Western Australia’s Pilbara, coming just two months after the first hole was drilled.
Atlas, which delineated an 8.1Mt resource at Anson at 57.5% iron, closed the session 0.36% lower at $1.395.
One of the biggest movers by percentage on the Final Call watchlist was Barra Resources, which closed up 75% at 9.3c on the back of an announcement by its joint venture partner in the Mt Thirsty project, Fission Energy, that the project was “potentially the world’s fourth-largest cobalt producer” according to results.
