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AUSTRALIAN stocks fell yesterday, led by BHP Billiton and National Australia Bank, even after US lawmakers finally approved a $US700 billion bank bailout plan.
Stocks across the board declined on fears that the US bank bailout would not be enough to reverse the global economic slowdown, as the package had failed to bolster sentiment and worse than expected US jobs data pointed to a higher risk of recession.
Australia's benchmark S-P/ASX 200 index ended down 3.3 per cent at 4540.4. It earlier touched its lowest since November 2005.
A public holiday in Canberra and Sydney resulted in lower trading volumes exacerbating price movements, said Bill Chatterton, ABN AMRO Morgans director of equities in Brisbane. Volatility is still alive and well.
Investors were cautiously waiting for today's decision from the Reserve Bank of Australia on interest rates and US Federal Reserve chairman Ben Bernanke's speech on credit markets, economy and monetary policy, Mr Chatterton said.
Shareholders were also awaiting details about how the US Treasury would implement the US Government's package, buy bank debt and what prices the unwanted assets might fetch, he said. It's going to take a while
Due to the slipping car market in the US and Europe, international giants like Toyota have hoped that China's stronger market would give them breathing space, while China's domestic auto market, weak since April this year, has hoped to see a rebound in September and October, a traditionally good season for car sales. But the market has had its own mind, and the week-long National Day holiday has been a disappointment all around.
The US government's zillion dollar rescue package is not going to benefit the automobile industry directly. The North American market remained heartbroken when sales figures for September were released on October 2. Sales volume of all auto companies in the world's largest automobile market slumped by 26.6% on average, a record high drop in the past 50 years
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