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The Australian market yesterday experienced its worst day in a year with a massive 3.1 per cent drop, wiping off more than A$40 billion value from the local market. Asian shares also saw broad sell-off on Monday due to the lingering euro zone debt issue. After flat lead from Wall Street, the Australian share market rose slightly at opening on Tuesday and soon moved back to negative territory.

Wall Street rally ended on Thursday as the market was suffering from "rally fatigue". The better-than-expected US jobless claims and corporate news failed to move investors who had been bombarded by positive news in recent sessions. A surge in oil stockpiles also raised concerns over the US recovery.

Wall Street continued its gains for a fifth day on Thursday on some upbeat economic data and corporate guidance. The Commerce Department's report showed a sign of consumer spending pickup as US trade volume and imports surged. A separate report said jobless claims fell to 550,000 in the past week.

At week's end, Wall St. rebounded with about 2.9% rise on hopes for further US rate cuts and President-elect Barack Obama's call for another economic stimulus plan. China's announcement over the weekend that it will spend 4 trillion yuan by 2010 to help re-ignite growth may also shore up Australian stocks, particularly miners.

Overnight Wall Street gained in a late rally early this morning, as investors snapped up beaten-down shares after Wall Street's worst day since the 1987, and consumer companies gained as the price of oil fell.

The Australian share market was boosted by banks yesterday after investor confidence returned following a rally overnight on Wall Street. The benchmark S&P/ASX200 index rose 89.2 points, or 1.84%, to 4936.7, while the broader All Ordinaries climbed 85.4 points, or 1.73%, to 5008.7.