Friday, May 18, 2012

Shares dive as spooked investors run for cover

The Australian share market has hit a six-month low, wiping $32 billion off the All Ordinaries Index, as investors headed for the exits amid fears about the ongoing instability in the eurozone.

Investors are following their overseas counterparts and pulling out of the share market, with the benchmark ASX 200 index losing 2.7 per cent to 4,047 and the broader All Ordinaries giving up 2.6 per cent to close at 4,099.

After a relatively flat close yesterday, investors hit the sell button at the start of trade, and Patersons Securities analyst Marcus Padley says there was nowhere to hide today.

"One of our advisors got asked by a client this morning what they should be buying, and she said 'the only thing I'll be buying you today is lunch'," Mr Padley said.

A Greek exit of the eurozone appears increasingly likely as the country lurches towards a new round of elections in mid-June, and the country was further downgraded overnight, this time by Fitch Ratings, from B- to CCC.

Eyes also are on Spain amid concerns about the health of the country's banks. Read More