Leading Aussie stocks fall by 3.7% on debt fears

More than $45 billion was wiped off the value of Australian stocks yesterday, as global economic woes again haunted investors.

The ASX dropped 156 points, or 3.7%, by the close, to 4038.5 while the broader All Ordinaries plunged by 152 points, or 3.6%, to 4125.1.

The drops hit all sectors, with financial, materials and energy stocks all suffering significant losses. The big four banks were all down, with the Commonwealth Bank’s shares slipping 3.4% to $45.78.

Meanwhile, the shares of bionic ear maker Cochlear fell as much as 26% after it recalled one of its leading products due to repeated failures.

The market was troubled by fears that Greece would default on its vast debt. The resignation of Juergen Stark, the European Central Bank’s chief economist, on Friday also hit confidence.

Following his exit, Stark called for widespread reform of the Eurozone, heightening fears that Europe was faced with further financial pain.

IG Markets analyst Ben Potter said it looked like “an ugly start to the new week as European fears once again weigh on confidence and sentiment.”