Tum­ble in fi­nal trad­ing ses­sion

Townsville Bulletin - - NEWS -

THE Aus­tralian stock­mar­ket has fallen heav­ily on the fi­nal trad­ing day of the fi­nan­cial year as in­vestors re­coil amid mount­ing signs the era of cheap credit is near­ing an end.

Al­most $ 28 bil­lion was wiped from the value of Aus­tralia’s top listed com­pa­nies yes­ter­day fol­low­ing a weak lead from Wall Street and ev­i­dence of a grow­ing will­ing­ness among cen­tral bankers to hike in­ter­est rates.

The bench­mark ASX 200 in­dex tum­bled 1.7 per cent — its worst ses­sion so far this year — to 5721.5 points, re­trac­ing much of the gains made over the pre­vi­ous two days.

The pull­back also took a lit­tle of the gloss off an­other sparkling fi­nan­cial year for the Aus­tralian bourse, which has climbed 9.3 per cent over the past 12 months but just 1 per cent since Jan­uary. All sec­tors closed sharply in the red yes­ter­day, with real es­tate and health­care the worst as in­vestors re­bal­anced port­fo­lios.

Ear­lier, the US bench­mark in­dex, the Dow Jones In­dus­trial Av­er­age, sank 0.8 per cent in its third worst ses­sion for the year.

An­a­lysts said there was also an over­ar­ch­ing sense that as global eco­nomic con­di­tions strength­ened, cen­tral banks were pre­par­ing to move away from emer­gency rate set­tings in place since the fi­nan­cial cri­sis, in turn mak­ing debt more ex­pen­sive.

Bank of Eng­land gover­nor Mark Car­ney set the tone on Wed­nes­day when he said Bri­tain’s cen­tral bank would de­bate a hike in com­ing months, while his Cana­dian coun­ter­part Stephen Poloz re­it­er­ated his bias to­wards an in­crease, height­en­ing ex­pec­ta­tions for a July move. The world’s most pow­er­ful cen­tral banker – Janet Yellen, chair of the US Fed­eral Re­serve – over­saw a rate hike last month, the third since De­cem­ber.

ARCHITECTS OF FOR­TUNE: Zammi Ro­han and Mark Kennedy are co- di­rec­tors of the new ar­chi­tec­ture firm Coun­ter­point. Pic­ture: WES­LEY MONTS

MARK KENNEDY

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