SYDNEY (Thomson Financial) - Australian shares are expected to open sharply lower Monday as investors react to a sell-off on Wall Street Friday following the release of weaker-than-expected job numbers for December, which ignited fears that the US economy is heading for a recession.
'Natural daily selling and distress selling without strong buying support today will see the market fall by what the futures are indicating,' said Stuart Smith, a private client advisor at Bell Potter Securities.
Falls will be accentuated by low volumes as many market participants are away for summer holidays, he said.
The S&P/ASX 200 March futures contract ended its last session down 141.0 points at 6,202.
On Friday, shares finished higher as investors seeking exposure to surging base metals and commodities prices snapped up shares in miners and oil producers, while bargain hunters picked through the banking sector.
The S&P/ASX 200 closed 16.1 points or 0.3 percent higher at 6,306.8. For the week, the benchmark index was down 0.5 percent.
The All Ordinaries finished up 12.8 points or 0.2 percent at 6,385.4.
In New York, share prices slumped after the release of data showing US non-farm payrolls rose by just 18,000 in December, the lowest result in almost five years and well below expectations for a gain of 70,000.
The unemployment rate rose sharply to a two year high of 5 percent in December from 4.7 percent in November. The Dow Jones Industrial Average closed down 256.54 points or 2.0 percent at 12,800.18, dropping through the psychologically important 13,000 mark.
News Corp fell 1.4 percent.
London share prices fell in reaction to the weak US jobs report.
The FTSE 100 ended down 130.9 points or 2.0 percent at 6,348.5, having erased all of the week's gains. For the week, the FTSE 100 was down 128.4 points.
BHP Billiton fell 3.4 percent as base metal and oil prices retreated on fears that a recession in the US would reduce demand.
Rio Tinto dropped 2.9 percent.
Crude oil prices retreated on Friday from 100 US dollars a barrel reached earlier in the week. The February Nymex crude oil contract fell 1.27 dollars to 97.91 dollars a barrel.
Base metal prices slumped on the London Metal Exchange on Friday on US recession fears. Zinc fell 2.7 percent with nickel and lead losing 2.6 percent each.
Gold prices retreated from record highs, in response to end-week profit-taking and a lower oil price. The most-active February Comex gold price fell 3.40 dollars to 865.70 dollars per ounce.
(1 US dollar = 1.15 Australian dollars)
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