Australia: Shares fall over 2% on worries about global growth

[SYDNEY] Australian shares fell 2.6 per cent on Monday, tracking negative cues from Wall Street after the US Federal Reserve's decision to keep interest rates on hold last week sparked uncertainty about global growth.

The S&P/ASX 200 index fell 133 points to 5,036.9 by 0218 GMT, its biggest percentage fall in almost a month. The benchmark is at its lowest level in nearly a week after three straight sessions of gains. It rose 0.5 per cent on Friday. "The market is thinking the Fed is seeing something that nobody else is and that is the reason why they didn't tighten", said Damien Boey, equity strategist, Credit Suisse. "The big concern for the Australian market is the same as the concern in the US - trying to read what's on the Fed's mind," he said, adding volatility in shares will continue.

Recent volatility in shares globally has unsettled investors as concerns about a global slowdown in the wake of China's market turmoil continue to weigh on sentiment, compounded by the Fed's decision to hold interest rates steady. "It's not impossible to arrest (volatility) but it needs recognition of the problem before we can arrest it." Financial stocks were hit hard with Westpac down 3.8 per cent, Commonwealth Bank of Australia, ANZ and NAB down almost 3 per cent, respectively.

Miners also weighed on the index with BHP Billiton and Rio Tinto losing more than 3 per cent each, while Fortescue shed nearly 2 per cent.

Energy stocks such as Woodside Petroleum lost 3.9 per cent and Beach Energy plunged 4.6 per cent.

For more individual stocks activity click on New Zealand's benchmark NZX50 share index eased 0.58 per cent to 5,677.9, but was still near four-week highs of 5,723.55 touched last week.

Investors were looking for inspiration as the focus returned to global growth concerns.

Energy stocks sagged after another tumble in oil prices on Friday, with Contact Energy off 1.4 per cent and Genesis Energy down 0.5 per cent. Fletcher Building was another casualty, off nearly 2 per cent.

In contrast, outdoorwear company Kathmandu Holdings was a clear outperformer, up 9.29 per cent after Briscoe Group's takeover offer lapsed last week.

Dairy giant Fonterra gained 1.57 per cent after it said it would cut more jobs than previously flagged. It had said in July that the cuts would result in payroll savings.

The most actively traded stock was telecom company Spark , up 0.16 per cent.

REUTERS