THE Australian share market closed sharply lower on concerns about increased US banking regulation and worries about a slowdown in China.
At 4:15pm (AEDT) toiday, the benchmark S&P/ASX200 index was down 76.6 points, or 1.59 per cent, at 4,750.6, while the broader All Ordinaries index dropped 77.7 points, or 1.6 per cent, to 4,771.9 points.
On the Sydney Futures Exchange, the March share price index futures contract was down 77 points at 4,724 on a volume of 39,729 contracts.
Patersons Securities associate director John Curtin said uncertainty was gripping the market after US President Barack Obama unveiled proposals to limit the size, risk taking and proprietary trading ability of large Wall Street banks.
Financial shares pulled the Dow Jones Industrial Average two per cent lower on Thursday, with banking giant Goldman Sachs plunging 4.1 per cent despite the bank beating December quarter earnings estimates.
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Uncertainty over the implications of the US President's proposals for credit markets hit the local banking sector as well as big cyclical stocks, Mr Curtin said.
"This is the pull-back the market needs to have,'' he said, adding he expects the S&P/ASX 200 to trade between 5,000 and 5,200 points by June.
"Australia's banks still rely on global credit to basically function so if there is a huge negative impact on credit - which hasn't happened - then that's negative for our banks.''
ANZ Banking Group led the big four banks lower, falling 61 cents, or 2.62 per cent, to $22.65, while National Australia Bank lost 47 cents, or 1.73 per cent, to $26.72.
Commonwealth Bank dropped 81 cents, or 1.43 per cent, to $55.75 and Westpac Banking Corporation gave up 23 cents, or 0.9 per cent,to $25.38.
Bigger moves were seen among diversified financials, with local investment banking giant Macquarie Group falling 37 cents, or 3.21 per cent, to $51.60.
Resources and energy stocks also suffered heavy falls, including Woodside Petroleum which released a good production report with upside, Mr Curin said.
BHP Billiton fell 97 cents, or 2.27 per cent, to $41.70, Rio Tinto declined $2.61, or 3.45 per cent, to $72.94 and Woodside lost $1.53 to $44.37.
Shares close higher as banks, miners gainObama calls for bank limits
