Australian Stocks Were Crushed Today As The World Shook On News Of Impending US Action In Iraq

Iraqi refugees. Spencer Platt/Getty Images

A weak Australian market stayed down for the sixth session in a row as the US foreshadowed targeted US military strikes in Iraq.

The market was already wary, eyeing the the Ukraine crisis and Russia’s trade sanctions, when President Barack Obama confirmed the US had air-dropped aid to civilians stranded in Iraq and that he had authorised targeted military strikes if US personnel were threatened.

The S&P/ASX 200 closed down 1.34% to 5,435.30.

Banks stocks fell heavily, with the Commonwealth Bank down 1.38% to $80.23, Westpac down 1.72% to $33.07, NAB down 1.74% to $33.85 and the ANZ down 1.7% to $32.29. –

The REA Group, which reported a 37% rise in net profit to $149.9 million for the year to the end of June, was punished by investors because expectations were nearer $154 million profit. The operator of fell 8.4% to $42.89.

Wesfarmers, the owner of supermarket chain Coles, was down 1.49% to $42.37, and its competitor Woolworths also lost 1.49% to $35.69.

In Japan, the Nikkei was down almost 3%. The Hang Seng recovered in its session for only marginal losses through the day.

Shane Oliver, Chief Economist at AMP Capital says a whole range of issues are weighing on confidence: Russian retaliatory sanctions, increased fears of a Russian invasion of Ukraine, the US finally committing to air strikes on northern Iraq, poor data in Europe, strong data in the US continuing to feed Fed tightening fears and even the latest Ebola virus outbreak.

From their recent highs US shares have now fallen 4%, Eurozone shares 10%, global shares 4% and Australian shares 3.5%.

“The share market correction may have a bit more to run, but we are getting close to a buying opportunity,” Oliver says.

“To be sure, the combination of factors now roiling markets is scary. But this is the usually the case during periods of market volatility.”

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