Sydney, Jan 7, 2008 (ABN Newswire) - Last updated at 1:30PM AEST January 7.


The Australian stock market has opened significantly lower today following a tumble on Wall Street last Friday, as a sharp rise in the US unemployment rate sparked fears that the economy is heading into a recession.

Stocks fell by 2.1% and the Australian dollar has opened lower at 87 cents, down from Friday's close of 88 cents.

On Friday, shares finished higher as investors seeking exposure to surging base metals and commodities prices began buying mineral and oil producers, and the banking sector was being scoured by bargain-hunters.

The S&P/ASX 200 closed up by 16.1 points or 0.3% at $6,306.8 and the All Ordinaries rose by 12.8 points or 0.2% to finish at $6,385.4.

However when share prices slumped in New York on Friday, the prognosis was grim for the Australian stockmarket Monday morning.

The US unemployment rate hit 5% for the first time in more than two years in a sign the US economy's woes are beginning to extend beyond the subprime housing crisis

Data was released Friday which showed US non-farm payrolls rose by just 18,000 in December, the lowest result in almost five years and well below expectations for a gain of 70,000.

The Dow Jones Industrial Average closed down 256.54 points or 2.0% at 12,800.18, dropping below the 13,000 mark.

The All Ordinaries index was down 136 points to 6,249 while the ASX 200 also fell 136 points to 6,171.

The losses across the ASX were broad based

At 1:00PM AEST BHP Billiton was trading down by 2.37% at $39.88 and the NAB has dropped by 2.57% to $36.37. I'd add a few more in rather than just give two stocks.


 

AIR publishes a weekly magazine. Subscriptions are free at http://www.aireview.com.au