5:00 PM Sydney – Australian market indexes plunged 2% after Chinese survey indicated a decline in manufacturing and U.S. Federal Reserve comments also contributed to the negative narrative. The Australian dollar dropped to a new one-year low.
Australian market indexes plunged 2% after a private Chinese survey indicated manufacturing weakness and U.S. Federal Reserve raised doubts over the economic stimulus duration.
The latest manufacturing survey conducted by HSBC showed that the sector shrank for the first time in seven months.
The Purchasing Managers Index declined to 46.6 in May, the first decline since October, and a reading below 50 indicates shrinking sector.
The global worries were compounded after Ford Australia announced its plan to shut manufacturing in Australia and eliminate 1,200 jobs by 2016.
The ASX 200 index plunged 103 or 2% to 5,062.40 and the broader All Ordinaries dropped 101.30 to 5,040.80.
Australian dollar plunged to 93.95 cents against the U.S. dollar and in stock trading turnover edged up to 1.3 billion worth $6.7 billion.
Stocks in Review
Rio Tinto dropped $1.20 to $55.10 and BHP slumped 39 cents to $34.88.
Woodside Petroleum Limited slid 9 cents to $37.47.
David Jones Limited slipped 7 cents to $2.65 and Breville Group fell 5 cent to $7.25. Woolworths dropped 53 cents to $33.97.
Mirvac Group slid 5 cents to $1.70. Lend Lease declined 31 cents to $9.99.
Westpac plunged $1.27 or 4.1% to $29.92, Commonwealth slipped 2.8% to $69.71 and National Australia Bank slumped 3.1% to $31.70 and ANZ dropped 4% to $28.13.
Ford Motor Company said it will close its manufacturing operations in Australia and close down two plants by 2016 and terminate nearly 1,200 workers. Labor cost at the Australian plans its twice the cost in Europe and four times at its Asian units.
“Geelong engine factory and the Broadmeadows assembly plant would be closed by October 2016,” said by Bob Graziano, president of Ford Australia.
James Hardie Industries plc slid 0.9% to $10.36 after the Ireland based fiber cement maker reported fourth quarter net sales in the fourth quarter ending in March jumped 6% to $326.8 million and in the net swung to loss of $69.5 million compared to net income of $480.7 million.
For the year, net sales climbed 7% to $1.32 billion and net income tumbled 92% to $45.5 million from $604.3 million.