Market‘s worst day in six months

AUSTRALIAN shares suffered their worst one-day performance since March yesterday but the Aussie dollar recovered slightly from a weak opening.

The ASX200 slumped 85.2 points, or 1.4 per cent, to 6100.3, while the All Ordinaries was down 82.5 points, or 1.3 per cent, to 6218.6.

Pepperstone head of research Chris Weston says fur- ther deterioration in US-Sino relations could be one of the factors to push the Aussie to break the US 70 cents barrier.

“There’s nothing working for the Australian dollar at the moment,” Mr Weston said, adding US Treasury bonds were also putting a dampener on the dollar.

The Aussie recovered from a rocky start to be buying 70.59 US cents last night, up from 70.58 US cents on Friday.

The heavy materials sector was the worst hit, sliding 2.4 per cent off the back of falling aluminium and copper prices overnight and movement by China’s central bank to free up liquidity in the sector.

Shares in giant BHP were down 2.8 per cent to $34.50, while Rio Tinto fell 1.6 per cent to $78.76.

“We’ve got a very simple market,” Mr Weston said. “When you’re seeing 2.3 per cent declines in the heavy materials sector you’re going to see falls elsewhere.”

ANZ shares took a big slide, falling 2.6 per cent to $26.99 after the lender flagged an $824 million hit to its full-year profit due to impairments and one-off expenses, more than half of it related to customer remediation.