Market falls away at end of session as investors retreat

The Australian stockmarket posted its biggest one-day fall in six years as Wall Street reeled in the wake of the rout in the US subprime mortgage sector. It was the largest fall since the September 11 US terrorist attacks wiped almost $53 billion from the value of the Australian market.
At the close, the benchmark ASX 200 index was 229.6 points lower at 5936, while the All Ordinaries retreated 222.5 points to 5965.2. Compared with the previous week's close, the ASX 200 was off 81 points or 1.41 per cent. On the Sydney Futures Exchange the September share price index contract was 227 points lower at 5924, on a volume of 34,944 contracts.
The chief executive of MFS, Guy Hutchings, said it would take time for the market to settle, with further volatility expected next week. "Cash is king at present, with the market continuing to respond very directly to offshore volatility as the fallout from subprime credit crisis spreads," Mr Hutchings said.
"Investors are clearly spooked by the extent of loses in the US and Europe overnight, and there were no real positions of safety, with losses across the board. The fact that the local market fell away quite dramatically at the end of the session implies traders did not want to hold stocks over the weekend."
The Dow Jones dropped 387.18 points to 13,270.68 overnight, the Standard & Poor's 500 Index dropped 44.40 points to 1453.09 and the Nasdaq dropped 56.49 points to 2556.49.
Locally, the big miners were weaker, with BHP Billiton losing $2 to $34.66 and its rival Rio Tinto losing $3.49 to $84.77. The big banks were weaker, with NAB losing $1.28 to $38.22, ANZ 75c to $28.22, Commonwealth $1.45 to $53.35 and Westpac 79c to $25.80.
Flight Centre lost $1.60 to $17.70, despite reaffirming its profit expectations for 2006-07 and estimating a lift in the value of its transactions this financial year by up to 15 per cent.
The furniture retailer Nick Scali picked up 10c to $2.50 on a negative day after reporting a 6.9 per cent increase in annual net profit for 2006-07 to $8.66 million. But retailers were mostly weaker, with Woolworths losing 80c to $26.36, Coles down 82c to $13.87, Harvey Norman down 19c to $5.04 and David Jones down 35c to $4.91. In the media, News Corp fell 84c to $25.93, PBL fell 38c to $18.08 and Fairfax fell 12c to $4.60.
Among energy stocks, Woodside lost $1.91 to $41.70, Santos lost 93c to $11.78 and Oil Search lost 26c to $3.41. Energy utility Alinta lost 34c to $14.54 despite posting a 20 per cent increase in first-half net profit to $96.5 million.
The spot price of gold was lower, trading at $US663.70 an ounce, down $US9.80 from Thursday's close. Preliminary market turnover reached 2.62 billion shares, worth $8.91 billion, with 225 stocks moving up, 1180 down and 230 unchanged.