By BRIAN GOMEZ in Sydney
PNG shares took a battering yesterday after the Australian Stock Exchange suffered a bigger collapse than in the aftermath of the terrorist attacks in the US on Sept 11, 2001.
In one of the biggest falls it has experienced in years, Oil Search shares crashed by 77 cents to A$3.72, while Lihir Gold was down 47c to A$3 a share.
The benchmark S&P/ASX 200 index, which monitors Australia’s top 200 listed companies, fell by 7%. This was the 12th daily decline which commentators said was the “longest losing streak” in decades.
The overall market has shed 18% since the beginning of this year and 24% from the ASX 200’s record high of 6828 set on Nov 1 last year.
The losses were felt across the board with blue chips such as BHP Billiton shedding A$2.29 to A$31 a share, Rio Tinto down A$13.25 to A$101, National Australia Bank down A$2.30 to A$32.90 and ANZ down A$1.85 to A$24.25.
Australia’s biggest gold miner, Newcrest Mining, fell A$3.36 to A$31.74 even though gold prices remained in near gold record territory at US$858 an ounce.
Except for Westpac, Australia’s three major banks had all hit their lowest levels in the past year.
Fears of an impending recession in the US, which would cut demand for crude oil, has helped oil prices ease to below US$90 a barrel and petrol pump prices should fall somewhat in the weeks ahead.
Fund managers and analysts were anxiously waiting for Wall Street to reopen after being closed last Monday for the Martin Luther King public holiday.
There were fears Wall Street could take another beating and lead to further panic selling around the world.
Following last Friday’s big losses in America, stock markets in Britain, France and Germany shed between 5% to 7% of their overall value overnight.
The Commonwealth Bank’s chief equities economist for CommSec Craig James said action was needed by US authorities to stem the “selling frenzy on global share markets” but he noted that selling on the ASX had been overdone.
“Valuations on our share market have fallen to the cheapest levels in almost 17 years,” he said.
The CommSec trading system crashed for about half an hour yesterday because of the huge numbers of selling orders flowing through.
According to AAP, the site logged 40,000 transactions in the first 90 minutes of trading compared with a normal daily average of around 50,000.
Among PNG stocks, Highlands Pacific fell by 0.7c to 9.8 cents to test its lowest levels in the past decade while Allied Gold dropped 18 cents to 58 cents; Marengo was down 7.5c to 19.5 cents; Emperor was down 1.4c to 5.2 cents and Frontier shed 3.4c to 8.1c.
Both Oil Search and Lihir Gold have fallen to their lowest levels since September last year.