Australian stocks smashed

Oleksandr Gorshkovozov and Illya Kvasha of Ukraineat FINA/NVC Diving World Series 2016 in Dubai. Francois Nel/Getty Images

Australian shares fell hard as investors again dropped financial stocks.

On the first session of a new month and quarter, the ASX 200 fell through the key level of 5000 points, losing more than 2%.

At the close, the index was at 4,999.40, down 83.39 points or 1.64%.

Overnight on Wall Street the S&P 500 fell by 0.2% as investors waited for jobs data due Friday US time.

Again, the major banks were hammered on the local market.

“Bad debt worries are clearly weighing on Australian banks and the Australian share market generally,” says Shane Oliver, head of investment strategy and chief economist at AMP Capital.

“While the extra $100 million in bad debt charges announced by one bank (ANZ) due to the resources slump is small, investors naturally worry that the bad debt cycle has now bottomed and like cockroaches if there is one downgrade there are likely to be more.

“So the concerns could linger for a while. Putting it all in context though resources related loans are only around 2% of total loans for the big four banks.”

Westpac today dropped below $30, falling 2.3% to $29.65.

The ANZ, which has been sold down since warning of more bad debts from resource industry-related loans, lost 2.7% to $22.81.

The Commonwealth shed 2.5% to $72.99 and the NAB 2.1% to $25.68.

All sectors were in the red with financial stocks down 2.4% and the energy sector 2.7%.

Santos, which announced a new executive team and a restructure, was down 4% to $3.86.

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