Overnight Wall Street slumped in late trading with Dow Jones Industrial Average ended the day down 2.5%. Australia's benchmark S&P/ASX-200 share index yesterday advanced almost 4% for a second straight session, bringing the two-day increase to more than 8%, as buyers flooded back into big mining companies.
Wall Street closed weaker on Friday with fluctuations that has become a standard in recent weeks and further turmoil overseas is likely to prompt fresh slides for Australia markets. Last Friday the Australia benchmark S&P/ASX 200 index lost 42.6 points, or 1.1%, to 3970.8, after rising as much as 3.4% in the morning. The broader All Ordinaries lost 43.3 points, or 1.1% to 3944.8.
Overnight the Wall St took a dive on grim economic news pointing to weaker growth and profits in the year ahead, with Dow Jones Industrial Average fell 7.87% for its biggest percentage loss since October of 1987. The US Federal Reserve's snapshot of business conditions said economic activity was weaker across all 12 districts in September and consumer spending fell in most regions.
Yesterday, the Australian share market ended almost 4% higher in its best two-day gain since 1975, adding $42 billion to the value of stocks listed in the All Ordinaries index. As confidence was buoyed, investors rushed back to the big miners and banks and pushed the two-day rally to 9% in total. The benchmark S&P/ASX200 index was up 154.5 points, or 3.7%, at 4335.2, while the broader All Ordinaries index gained 169.6 points, or 4.09%, to 4311.5.
The Australian share market ended a horror week on Friday, down more than 8% in a session that wiped A$106 billion from the value of stocks on the bourse. Last Friday the S&P/ASX200 index fell 8.3% in mid-afternoon trading, losing 360.2 points to plunge to 3960.7, the biggest one-day loss for the ASX200 index. Its affiliate, the All Ordinaries index, had its worst day since the October 1987 crash, losing 8.2%, or 351.9 points, to 3939.4. The ASX200 lost almost 16% for the week, about three times the amount it lost in the week after the September 11 attacks in 2001.
Overnight Wall Street closed more than 5% down on growing fears that the spiralling credit crisis would drag the US economy into a recession. While the global financial crisis deepened, RBA cut the interest rate by a full percentage point, double the amount that had been expected.
Yesterday the Australian sharemarket closed lower for the third consecutive day on concerns that Wall Street's latest banking woes would hit Australia. The four major banks deducted the most from the index with their major losses of more than 3% following Lehman Brothers' announcement overnight in New York of asset sales.
Yesterday, the benchmark S&P/ASX200 fell 91.2 points, or 1.85 per cent, to 4,814.3, while the broader All Ordinaries shed 89.9 points, or 1.81 per cent, to 4,871.5.
