ASX slumps to 8 week low

ASX slumps to 8 week low

The Australian sharemarket has continued its downward slide as the storm clouds start to seriously darken in Europe and even China begins to look shaky.

By early afternoon, the ASX200 had dropped to 3986, the lowest point since early October, 2011 and little over half its 2007 peak of 6852.

The Energy index was hardest hit with Woodside Petroleum (ASX:WPL) falling over 9% to $32.18 after announcing a production increase of 27% in 2012, well short of analyst expectations. Nexus Energy (ASX:BXS) by contrast continued their upward trajectory, climbing nearly 5% to 32c after former chief executive Richard Cottee’s plan to oust the Nexus board failed last week.

The banks were also hit hard with Westpac (ASX:WBC) losing 36c to $19.39 and the National Australia Bank (ASX:NAB) giving up 41c to $21.83. QBE Insurance (ASX:QBE) dropped 5% to $13.15 with 80% of its business offshore, and “offshore” increasingly equated with risk.

Telstra (ASX:TLS) was one of the shelters from the storm gaining 1c to $3.14, the only ASX20 stock to do so. Singtel (ASX:SGT) fell 3c to $2.40. The relative stability of the telecommunications market reflects the likelihood that in a recession, telecommunications spends are likely to be less impacted than other discretionary spends.

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