The Australian sharemarket fell to a five-month low in early trade, giving up all gains accrued through 2012, following big falls on overseas markets overnight and continued political uncertainty in Europe.
At 11.15 this morning, the benchmark S&P/ASX 200 index dropped 2.15% to 4,067.9 points and the broader All Ordinaries Index fell 2.167% to 4,117.4 points.
The figure is the lowest point for the ASX/200 since December 30 last year, when it reached 4,056.6 points.
Get daily business news.
The latest stories, funding information, and expert advice. Free to sign up.
Ric Spooner, chief market analyst at CMC Markets, said the Australian sharemarket was set to follow US and European markets lower today.
“Investors are again facing a dilemma they have become well used to in recent years,” said Spooner.
“They need to choose between what will be cheap share valuations if Europe can resolve the current crisis and unknowable but potentially large risks if the situation continues to unravel.”
Choice claims Qantas charging travellers $100m extra in processing
The consumer group says Qantas’ credit card surcharges may be costing travellers $100 million more than the airline pays to process the payments.
The Reserve Bank of Australia Payments System Board meets today and is expected to introduce new surcharge limits designed to limit excess rip-offs.
“Our analysis shows that the Qantas group may be charging consumers at least $100m more each year than it needs under the guise of covering processing costs,” Matt Levey, Choice head of campaigns, said.
Qantas charges $7.70 for credit card payments on domestic bookings and $30 for credit card payments on international flights.
Dollar falls on Europe fears
The Australian dollar has fallen back to US 98 cents amid reports of widespread bank withdrawals in Spain and Greece as fears grow that the euro zone debt crisis will worsen.
At 11.30 today, the Australian dollar was trading at US 98.44 cents, down from US 99.47 cents yesterday.
European Union “fully confident” euro will survive
The head of the European Union Commission has told the UN General Assembly he is “fully confident” that the 17 countries using the euro and all European institutions will do whatever is necessary to overcome the current financial crisis.
Commission president Jose Manuel Barroso said that despite all the difficulties, he was bringing the 193-member world body “a message of confidence” that the European Union is “on the right track”.
“We are doing a root-and-branch reform of our budgetary and economic policies,” he said.
Barroso comments come as Fitch ratings agency downgrades Greece deeper into junk territory, warning of a “probable” Greek exit from the euro currency union if new national elections next month produce an anti-bailout government.
Fitch says it has cut Greece’s rating by one notch, from B- to CCC, the lowest possible grade for a country that is not in default.