Shares drop on slowdown fears

The Australian share market closed lower today as investors continued to fret over an economic slowdown and were spooked by a profit downgrade from property trust GPT Group.

The benchmark S&P/ASX200 index fell 79.6 points, or 1.57%, to 5002.5, while the broader All Ordinaries dropped 78.3 points, or 1.51%, to 5091.7.

Ord Minnett private client adviser Jon Hancock said stocks in resources, asset management, property and infrastructure led the market down.

"It's hard to find anywhere where there was a gain,'' Mr Hancock said.

Mr Hancock said the market fell for a variety of reasons, including no lead from US markets because they were closed for a public holiday on Friday, and an ANZ Banking Group monthly survey showing that the total number of job advertisements had fallen.

"There's still an overall sentiment of a banking crisis and global slowdown which is weighing heavily on the market, and it's likely to continue for some time,'' Mr Hancock said.

Property trust GPT Group plunged 36 cents, or 14.63%, to $2.10.

It cut full-year operating income guidance by 27% as the credit crisis forced the company to postone asset sales.

Elsewhere in the property sector, Stockland lost 35 cents to $5.17.

In the resources sector, global miner BHP Billiton fell 95 cents to $39.75 as it started first production from the $1.16 billion Neptune oil operation in the Gulf of Mexico. Rio Tinto lost $2.45 to $123.25.

Fox Resources shed 5 cents to 75 cents as it was forced to wind down underground mining at its Radio Hill operation in Western Australia and defer a key growth nickel project after a drop in commodity prices.

Fortescue Metals fell 4.1%, or 40 cents, to $9.36.

Oil and gas producer Woodside Petroleum fell $1.65 to $60.10 and Santos sagged 55 cents to $19.40.

Adelaide Energy nudged up 1 cent to 11.5 cents after it bought the Katnook gas fields and processing plant at the Otway Basin in South Australia from Origin Energy Resources and SAGASCO South East.

US markets were closed on Friday for the July 4 Independence Day public holiday.

In Britain, the FTSE 100 shed 63.8 points, or 1.16%, to 5412.8 as banking stocks slipped and oil companies tracked softer crude prices.

In the gold sector, Newmont lost 1 cent to $5.16, Newcrest was down $1.66 to $28.32 and Lihir weakened 8 cents to $3.06.

At 4.35pm, the price of gold in Sydney was $US923.65 per fine ounce, down $US10.65 on Friday's close of $US934.30.



The big four banks were all lower, led by the Commonwealth Bank, which fell 2.1%, or 88 cents, to $41.45, NAB fell 1.7%, or 47 cents, to $27.07, ANZ fell 1.64%, or 32 cents, to $19.20 and Westpac fell 1.5%, or 30 cents, to $20.00.

Elsewhere in the financial services sector, Bell Financial Group surged 19.5 cents to $1.12 as it agreed to buy Southern Cross Equities for an expected $150 million in cash and scrip to create Australia's largest independent broker.

Challenger Financial Services added 11 cents to $2.16 as it said it would buy back up to 10% of its issued capital.

On the retail side, Woolworths closed 2.7%, or 63 cents, higher, at $24.03, but Wesfarmers dipped 0.35%, or 12 cents, to $34.25. Shopping centre owner Westfield closed 0.8% higher, adding 13 cents to $16.23.

Telco Telstra eased 4 cents to $4.29 and Optus-owner Singapore Telecommunications was steady at $2.66.

Among media stocks, News Corp fell 8 cents to $15.60, and its non-voting scrip stepped back 16 cents to $15.33.

Consolidated Media was off 18 cents at $3.17 and Fairfax lost 8 cents to $2.79.

The top-traded stock by volume was gemstone producer Cluff Resources, with 116.55 million shares worth $2.66 million changing hands. Cluff was steady at 2.2 cents.

Preliminary national turnover was 1.32 billion shares worth $4.02 billion, with 694 stocks down, 421 up and 330 unchanged.

The September share price index futures contract was down 66 points to 5008 on a volume of 16,040 contracts, according to preliminary calculations.