Miners take hit

The Australian stock market has fallen again with fears of a US recession sparking Wall Street to its worst day since the 1987 crash, reports smh.com.au

The Australian stock market has fallen again with fears of a US recession sparking Wall Street to its worst day since the 1987 crash, reports smh.com.au.

The week’s losses have effectively erased last Monday’s rally, which came after coordinated government efforts to stabilise the financial market brought large numbers of buyers back into the marketplace.

According to smh.com.au, the most damage was done by commodity producers, with Rio Tinto yesterday dropping more than 15% after earlier reports that a major Chinese shareholder’s stake in the mining giant was caught up in last month’s collapse of US investment bank Lehman Brothers.

Australia’s benchmark S&P/ASX200 index was down as much as 6.6%, but rallied slightly to be down 5.8% for the day.

The Australian dollar fluctuated around the 65 US cent mark, before rising to be trading at 67.6 US cents.

Rio’s stocks plunged by as much as $11.84, or 15% to $66.66 after reports that Chinalco may have to dump the miner. It has since risen to $68.25 to be down 13% on the day.

Other major miners were also hit hard, with BHP Billiton lowering as much as 13% and Foertescue falling 19%.

To keep up to date with Australian Mining, subscribe to our free email newsletters delivered straight to your inbox. Click here.