Australian shares fell 1.7 per cent, the most in about nine weeks, as investors digested weaker-than-expected profits from the country’s third-largest lender Westpac and renewed worries about Greece.
The market was also dragged lower as BHP Billiton hit a five-week low after lacklustre copper prices.
The benchmark S&P/ASX 200 index fell 72 points to 4,181.4, according to the latest data, its weakest close since mid-January. The wider All Ordinaries lost 70.2 points, or 1.6 per cent, to 4257.2 points.
News that Australia's jobless rate had unexpectedly dropped to 5.1 per cent last month did little for stocks. The news, including data showing the economy had added 46,300 jobs for the month - the most in 15 months - did send the dollar half a US cent higher. The currency, though, later gave up those gains against the greenback.
Shares in Westpac Banking Corp lost 3.5 per cent, or 74 cents, to end the day at $20.22 after it posted a 3 per cent fall in cash profits in the first-quarter, more than analysts had anticipated.
BHP fell 2.2 per cent to $35.30, its lowest since January 9, as London copper prices hit a three-week low after signs of a delay to a bailout for Greece heightened worries about the demand prospects for industrial metals
Qantas shares, though, surged the most among the top 200 stocks 6 per cent, or 9.5 cents, to 165.5 cents after the airline said it would slash 500 jobs.
Negative view
IG Markets market strategist Stan Shamu said investor sentiment had turned negative after European Union officials remained highly reluctant to approve a second Greek bailout package worth 130 billion euros ($A159.44 billion).
Mr Shamu said there had been unconfirmed reports that the second rescue deal could be pushed beyond March, with some suggesting there may be a bridging loan that would provide Greece with just enough funds to make its 14.4 billion euro ($A17.66 billion) bond redemption on March 20.
‘‘This would avoid giving Greece the full 130 billion euros until after the April Greek elections, when it (the euro zone) could get a clearer picture of whether the newly-elected party will keep to the austerity measures,’’ he said.
Mining giant BHP Billiton was down 80 cents, or 2.22 per cent, at $35.30, Rio Tinto gave up $1.59, or 2.31 per cent, to $67.28 and Fortescue Metals Group backtracked 22 cents, or 3.98 per cent, at $5.31.
Banks retreat
The big four banks were all weaker, led by Westpac after it painted a bleak outlook for the economy
ANZ dropped 50 cents, or 2.3 per cent, to $21.20, National Australia Bank was down 42 cents, or 1.82 per cent, at $22.63 and Commonwealth Bank retreated 38 cents to $49.85.
The worst performer on that index was breads and spreads maker Goodman Fielder, which reported a 77 per cent fall in first-half profit.
Goodman Fielder shares were down three cents, or 5.88 per cent, at 48 cents.
Caltex has not ruled out shutting down its Australian oil refineries after writing down the value of its assets by $1.5 billion due to a high dollar and competition from Asia.
Caltex eased 19 cents, or 1.52 per cent, to $12.35.
Coles owner Wesfarmers reported a mere 0.3 per cent rise in first half profit amid challenging short-term trading conditions.
Wesfarmers was down 76 cents, or 2.55 per cent, at $29.09.
The spot gold price in Sydney at 1618 AEDT was $US1,720.80 per fine ounce, down $US6.65 from Wednesday’s local closing price of $US1,727.45.
Preliminary market turnover was 2.02 billion shares worth $5.77 billion, with 317 stocks up, 681 down and 378 steady.
On the ASX 24 at 1635 AEDT, the March share price index futures contract was down 80 points at 4,140 points, with 47,148 contracts traded.
Reuters, AAP
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