Beware of the latest share-buying spree Source: Supplied
TWENTY-FOUR billion dollars has been wiped off the value of Australia's top 200 companies today as investors cashed in on the stellar run.
Yesterday global markets soared after the Dow Jones reached five-year highs and local shares hovered around the 5100 mark.
But today the table turned as investors cashed in on profits.
The ASX200 closed down 118.6 points, or 2.33 per cent, lower at 4,980.1 while the broader All Ordinaries index was down 115.8 points, or 2.26 per cent, at 4,998.6 - wiping about $36 billion off Australian shares today.
"At some point there is going to be some profit-taking, " said Savanth Sebastian of CommSec. "If the market kept going the way it was going it would be up 68 per cent since the beginning of the year which isn't feasible."
A couple of triggers sparked today's sell-off which was the market's largest one-day decline in nine months.
Firstly, commodity prices tumbled overnight. This was due to rumours of a big commodity hedge fund in the US going into liquidation.
"This [rumour] leads to a slide in commodity prices and hits the big energy and material stocks," said Mr Savanth.
Gold stocks were heaviest hit, tumbling 4.38 per cent and materials stocks dropped 3.33 per cent.
Secondly, the unresolved issue of the "fiscal cliff" in the US which has been postponed from December 31 until March 1 is looming and weighing on the market.
"On 1 March $85 billion worth of tax cuts need to happen in the US unless they pass a new bill. That's also in the back of investors' minds." said Mr Savanth.
Overnight US stocks closed sharply lower after the Federal Reserve released minutes from its latest monetary policy meeting showing officials were split over its asset-purchases programs.
The Dow Jones was down 108.13 points (0.77 per cent) at 13,927.54 after reaching five-year highs the day before.
Miners and financials tumble
BHP Billiton lost $1.48, or 3.83 per cent, to $37.17, Rio Tinto slipped $2.09, or 3.01 per cent, to $67.30 and Fortescue Metals dipped 12 cents, or 2.44 per cent, to $4.80.
The spot price of gold in Sydney was $US1,561.20 per fine ounce, down $US46.17 from Wednesday's closing price of $US1,607.37 per ounce.
ANZ eased 76 cents to $27.98, CBA tumbled $2.04 to $64.81, NAB was $1.14 lower at $29.42 and Westpac fell 86 cents to $29.49.
A rare positive was Qantas, whose shares gained 4.5 cents, or 2.79 per cent, to $1.66 after posting first half net profit of $111 million, more than double the $42 million achieved in the prior corresponding period.
Preliminary national turnover was 1.9 billion securities worth $6.8 billion, with falling stocks outnumbering rising stocks by more than three to one.
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