The Australian sharemarket has had a horror start to the week, mirroring falls on Wall Street on Friday after the resignation of a key European Central Bank resigned and US President Barack Obama announced his $US447 billion jobs plan.
At 12.05 AEST, the benchmark S&P/ASX 200 index had lost 2.95% to 4,070.6 points, while the broader All Ordinaries Index had dropped 2.78% to 4,158.1 points.
IG Markets analyst Ben Potter said it looked like “an ugly start to the new week as European fears once again weigh on confidence and sentiment.”
The losses were broad-based, with the major banks and resource companies all weaker in early trade in response to declining risk appetite due to growing concerns of a second market collapse should the European debt crisis worsen.
On Friday, the benchmark S&P/ASX200 index closed 0.16% higher at 4,194.7 while the All Ords index was slightly stronger at 0.18% to 4,277.
The trade surplus increased to $1.826 billion during July, according to the latest figures from the Australian Bureau of Statistics, up from $1.817 billion in June.
The result is slightly lower than expected, with economists forecasting $1.9 billion, seasonally adjusted.
The statistics reveal exports fell 1% in adjusted terms, with imports also down 1%.
Personal finance commitments rise 0.5%
Meanwhile, personal finance commitments increased by 0.5% during July to $7 billion, up from $6.9 billion, according to the latest figures from the Australian Bureau of Statistics.
The stats show housing finance for owner occupiers rose by 1.4%, while commercial and lease finance rose by 6.1% and 3.4% respectively.
In politics, the Government has rejected a report in The Australian that it plans to raid the Future Fund to help meet its promise to return the budget to surplus in 2012-13.
Labor backbencher Andrew Leigh says the fund has not been touched.
“We are not making any withdrawals from the Future Fund,” Leigh told Sky News.
The fund was set up by the Government to help pay the superannuation liabilities of public servants.
And a measure brought in to shore up confidence in Australia’s banking sector during the GFC has been scaled back three years on.
From February next year, the Government will insure deposits of up to $250,000 per person per financial institution, one-quarter of the total insured since late 2008.
Treasurer Wayne Swan said the new amount would still cover 99% of deposits at authorised deposit-taking institutions.
“It will ensure that we continue to have one of the most generous and secure deposit insurance schemes in the world,” Swan said.
Tiger has announced former Virgin Blue chief operating officer Andrew David will act as chief executive of the company’s Australian division.
Tiger has been looking for someone to fulfil the role since the aviation authority grounded the airline back in July.
“We are pleased to welcome Andrew David as the new CEO of Tiger Airways Australia. He brings a wealth of airline business experience and a proven leadership track record,” acting chief Chin Yau Seng said in a statement.
Tiger has been back in the air since August 12, after being grounded for six weeks.
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