Credit fears send stocks tumbling

Investors have stripped $38.2 billion from the Australian stock market amid continuing global credit woes and fears of a recession in the US, with expectations the rout is set to continue.The benchmark S&P/ASX200 index was 171.5 points, or 3.16%, lower at 5264, while the broader All Ordinaries fell 163 points or 2.95% to 5368.9.It was the biggest fall on the market since February 6.At the close of day trading on the Sydney Futures Exchange, the March share price index contract was 174 points lower at 5270, on a volume of 27,280 contracts.CMC Markets senior dealer Dominic Vaughan said losses on the local market were driven by continuing credit woes, with further falls expected.''We got a double whammy today, we've had soft retail prices overnight and a continuation of the woes within the financial sector,'' Mr Vaughan said.''The US fell quite heavily last night and again it is financial issues.''We still have some downside left in the market, which is sad to say, but that's the way it is looking trend-wise, it is still looking heavy.''ANZ dropped 93 cents to $20.26, National Australia Bank lost $1.53 to $26.93, Commonwealth Bank shed $1.22 to $39.35 and Westpac gave up 99 cents to $21.14.The market got off to a poor start following a weak lead from Wall Street overnight after the the Dow Jones industrial average lost 214.6 points, or 1.75%, to close at 12,040.39.Allco Finance Group lost 10.5 cents or 16.67% to 52.5 cents after a major shareholder, Allco Principal Investments, said last night it was likely to go into voluntary administration after it was unable to seal standstill agreements with its margin lenders.NAB is expected to book a loan loss provision of around $90 million on a $110 million loan to API, prompting broker Citigroup to today slap a ``Sell'' recommendation on NAB.Qantas dropped 28 cents to $4.03 and has denied suggestions that it's in discussions with Bankstown Airport about operating services to and from the site in Sydney's western suburbs.Woolworths lost $1.34 to $28.70, David Jones dropped 20 cents to $3.81 and Harvey Norman slipped five cents to $4.00.Wesfarmers, the owner of Australia's second largest retailer, Coles, dropped 94 cents to $37.72.Bakery and spreads group Goodman Fielder dipped 4.5 cents to $1.795 after the company snapped up biscuits and muesli bars manufacturer Paradise Food Industries for about $80 million.The media sector was also weaker, with Consolidated Media Holdings shedding 43 cents to $3.87, Fairfax falling 14 cents to $3.81, News Corp dropping 43 cents to $20.25 and its non-voting shares losing 42 cents to $19.54.The energy sector was weaker, with Santos losing three cents to $12.40, Woodside shedding 33 cents to $56.50 and Oil Search falling one cent to $4.35.The big miners were weaker, with BHP Billiton losing 92 cents or 2.31% to $38.88 and rival Rio Tinto falling $4.80 or 3.53% to $131.20.The spot price of gold was lower and it closed Sydney trading at $US982.90 an ounce, down $US3.50 on yesterday's local close of $US986.40 an ounce.Newmont added two cents to $5.48, Newcrest fell 16 cents to $40.09 and Lihir retreated nine cents to $4.08.Empire Oil & Gas was the most traded stock on the market, with 137.87 million shares changing hands, worth $3.05 million.Market turnover reached 1.69 billion, worth a total value of $7.22 billion, with 326 stocks rising, 927 falling and 342 unchanged.AAP