The big four banks led the benchmark S&P/ASX200 index into negative territory after the S&P500 in New York posted its biggest one-day loss since September.
That followed even bigger declines in London, Frankfurt and Paris after the ECB failed to meet analyst hopes for greater stimulus. Frankfurt’s DAX 30 and the CAC 40 in Paris closed down 3.58 per cent, while London’s FTSE 100 lost 2.27 per cent.
“The key thing for the ASX today is how the banks are going to perform and, looking now at the early match prices. It’s looking like a pretty miserable day for the financial sector,” IG market analyst Angus Nicholson said.
At 10.28am (AEDT), ANZ was down 57 cents, or 2.05 per cent, at $27.24, while Commonwealth Bank had shed $1.33, or 1.63 per cent, at $80.17.
Westpac had lost 61.5 cents, or 1.87 per cent, at $32.29, and National Australia Bank was down 44 cents, or 1.46 per cent, at $29.60.
The big miners were also down, with Rio Tinto lower by 77 cents, or 1.69 per cent, to $44.82.
BHP Billiton dropped 19 cents, or 1.04 per cent, to $18.00 and Fortescue Mining Group lost 2.0 cents, or 1.04 per cent, at $1.90.
The malaise was across the board as Coles’ parent company Wesfarmers dropped 1.57 per cent, or 61 cents, to $38.30, and healthcare also performed poorly, with CSL and Resmed among those in the red.
Electronics retailer Dick Smith, which has lost more than 80 per cent of its value after a pair of profit warnings that followed disappointing October and November sales, was down 1.0 cent, or 2.5 per cent, at 39 cents following confirmation that it will lose its place in the list of the top 200 companies in December.
“I don’t think Dick Smith will be back in there any time soon,” Nicholson said.
“They’ve got a really difficult time again ahead of them.”
At 6.45am (AEDT) on Friday, the December share price index futures contract was down 76 points at 5,155.
Locally, in economic news on Friday, the Australian Bureau of Statistics releases October’s retail trade data and overseas arrivals and departure figures for the same month.
In equities news, BHP Billiton’s battle against the Queensland government over coal royalties in expected to be in court on Friday.
Washington H Soul Pattinson holds its annual general meeting on Friday while Asciano is expected to release target’s statement.
In Australia, the market on Thursday closed lower as the big miners suffered sizeable falls.
The benchmark S&P/ASX200 index was down 30.6 points, or 0.58 per cent, at 5,227.7.
The broader All Ordinaries index was down 28.0 points, or 0.53 per cent, at 5,276.7.
NEW YORK – US equity markets have slumped on investor disappointment over the European Central Bank’s latest policy easing measures.
The ECB cut its deposit rate by the minimum 0.1 percentage point most traders had expected, to -0.3 per cent, and extended its asset purchase program but did not increase the amount of government bonds it buys each month.
“Markets are still trying to digest the implications of the ECB disappointing market expectations,” said Steven Englander, head of G10 foreign exchange strategy at Citi in New York.
“The market is taking the message that the ECB will be less willing to ease down the road as well.”
The Dow Jones industrial average fell 186.03 points, or 1.05 per cent, to 17,543.65, the S&P 500 lost 24.25 points, or 1.17 per cent, to 2,055.26 and the Nasdaq Composite dropped 75.05 points, or 1.46 per cent, to 5,048.17, by 0649 Friday AEDT.
LONDON – Europe’s stock markets have nosedived after the European Central Bank cut a key rate and expanded stimulus with analysts saying it should have done more to rekindle eurozone growth.
The euro meanwhile jumped to nearly $US1.09 ($A1.49) before settling at $US1.0865, having struck $US1.0551 on Wednesday – its the lowest level since mid-April.
“The cut in the ECB’s deposit rate from -0.2 per cent to -0.3 per cent comes as a bit of a relief after incorrect last minute reports (by some media) that it had left rates unchanged,” said Jonathan Loynes, chief European economist at Capital Economics.
But, he added: “Hopes that the ECB would make up for the disappointingly small cut in its deposit rate with a decisive expansion of its asset purchase program have been dashed by the announcement that it has merely extended the program from September 2016 to March 2017.”
Markets plunged in reaction with both Frankfurt’s DAX 30 and the CAC 40 in Paris ending the day down 3.58 per cent, while London’s FTSE 100 index lost 2.27 per cent.
HONG KONG – Asian stocks slipped and the US dollar advanced after hawkish comments from US Federal Reserve Chair Janet Yellen reinforced the case for an interest rate hike later in December.
Shares in Hong Kong, Malaysia and Singapore declined.
Shanghai bucked the trend and closed up 0.7 per cent, brushing aside a Caixin/Markit Purchasing Managers’ Index showing China’s services sector growth cooling in November. Weak indicators often stir hopes of government stimulus, providing a burst of support for Chinese shares.
Japan’s Nikkei eased from 3-month highs and stood nearly flat, bound in narrow range as a wait-and-see mood prevailed ahead of the European Central Bank’s policy decision due later in the session.
Fighting stubbornly low inflation, the ECB is expected to deliver measures that could include a deposit rate cut and changes to its asset-buying program.
“The ECB’s decision will likely set the direction for the Japanese market tomorrow and beyond, but it’s also true that the market is seen overbought recently,” said Hikaru Sato, a senior technical analyst at Daiwa Securities in Tokyo.
The Fed chair on Wednesday said she was “looking forward” to a US interest rate hike that will be seen as a testament to the economy’s recovery.
Her comments came after expectations for a Fed rate hike at the central bank’s December 15-16 policy meeting were slightly shaken by poor manufacturing data released earlier in the week.
WELLINGTON – The S&P/NZX 50 Index dropped 17.64 points, or 0.29 per cent, to 6125.67.
ASX stocks to watch
AIO – ASCIANO: Asciano expects to release target’s statement on Friday.
BHP – BHP BILLITON: BHP vs the Queensland government battle over coal royalties is expected in court on Friday.
SOL – WASHINGTON H SOUL PATTINSON: Washington H. Soul Pattinson holds its annual general meeting on Friday.
AAP
