Australian Sharemarket Slips 3.7 Per Cent On Global Stocks Carnage

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August 8th, 2011

AUSTRALIAN stocks plunged 3.7 percent in early trade today following sharemarket carnage in the United States and Europe overnight.

At 10:15 am (AEST), the benchmark S&P/ASX 200 was down 147.1 points at 3839.0 as fear continued to dominate following Standard & Poor's unprecedented downgrade of the United States.

"Nothing is going to be spared but once again we expect it will be the cyclical, riskier sectors that get belted the most," said IG Markets analyst Ben Potter.

"It (is) going to be another complete bloodbath for the Australian market as fear and panic continue to dominate investors' minds."

However Mr Potter said there might be some relief with the release later today of a raft of Chinese economic figures.

"Whilst most economic data is ignored in these types of indiscriminate markets, today's barrage of Chinese data will still be watched closely," he said.

Of the major companies, Rio Tinto was down almost five percent, BHP was off almost three per cent and Commonwealth Bank was 2.3 per cent lower.

The Australian dollar has tracked markets down and was more than 1.5 US cents weaker this morning as the American credit downgrade continues to drag on risk sentiment.

In early trade, the Australian dollar was trading at 101.50 US cents, down from 103.55 cents yesterday. The dollar hit a peak of 110.81 US cents on July 27, its highest level since it floated in December 1983.