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Australia stocks down 1.8% after Lehman collapse

Australia stocks down 1.8% after Lehman collapse
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First Published: Mon, Sep 15 2008. 12 46 PM IST
Updated: Mon, Sep 15 2008. 12 46 PM IST
Melbourne: Australian shares fell 1.8% on Monday on concerns over the effect on global markets and financial health of Lehman Brothers’ filing for bankruptcy protection and Bank of America Corp’s acquisition of Merrill Lynch & Co Inc.
National Australia Bank Ltd, considered the most vulnerable of Australia’s top banks to further writedowns, hit an eight-and-a-half year closing low, dropping 4.8% to A$22.82.
“Investors are being very cautious ... really waiting to see what reaction the Dow Jones is going to have,” said Grant Williamson,“ a partner at New Zealand brokerage Hamilton Hindin Greene.
Australian investment bank Macquarie Group fell 10% to A$39.46 while Babcock & Brown Ltd ended down 17% at A$1.58.
Miners lent some support after metal prices rose, with some investors buying gold as a safe haven. Gold miner Newcrest Mining Ltd jumped 8.2% to A$21.10.
The benchmark S&P/ASX 200 index ended 86.1 points lower at 4,817.7, according to the latest available data. The index earlier fell to a five-week low of 4,770.9.
New Zealand’s NZX50 index fell 1.2% to 3,319.9.
Dow Jones industrial average futures pointed to a more than 300-point fall in US shares, and investors were betting that there would be more victims of the sub-prime mortgage crisis, with the problem set to haunt markets for some time.
The New York Times said American International Group Inc approached the Federal Reserve seeking an unprecedented $40 billion in short-term financing.
AMP Ltd, Australia’s third-biggest retail fund manager, fell 8.1% to A$6.83. Standard & Poor’s lowered AMP’s credit outlook rating to stable from positive, saying its income could weaken as stock values fell and investors shifted to more conservative investments with lower fees to the manager.
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First Published: Mon, Sep 15 2008. 12 46 PM IST