Economists predict 2pc drop on local market
Posted
Economists are predicting heavy falls on the Australian share market today, following news from United States car-maker Ford of a $9 billion loss in three months.
US stocks fell nearly 2.5 per cent after Ford posted the record loss for the second quarter and home sales fell to their lowest level in a decade.
CommSec chief economist Craig James says he expects similar falls on the physical share market.
"We are going to see declines in the order of 2 per cent on our market today," he said.
"In Europe, losses were in the order of 1,5 per cent, losses in the order of 2 per cent in the US, so we should similar sort of treatment in our market."
Mr James said Ford's share price was knocked by the record loss.
"Its share price fell by 15 odd per cent and financial stocks were weak and the oil price rose," he said.
"So you name it, it went wrong."
The Dow Jones Industrial Average closed down 283 points to 11,349.
In Australian futures trade, the Share Price Index 200 contract fell 2 per cent to 5,040.
