Horror day on ASX as falls wipe out 2012 gains: Afternoon market insights

The Australian sharemarket tumbled to a six month low, giving up all of its gains so far this year. It followed big falls on overseas markets overnight.

At 16.15 AEST, the ASX200 was 2.66% lower, closing at 4,046.5 points, while the broader All Ordinaries index fell 2.60% to 4,098.8.

At its lowest point, the market dropped to 4,026.5 points, a level not seen since November 28 last year.

Ric Spooner, chief market analyst at CMC Markets, says the Australian sharemarket was set to follow US and European markets lower today.

“Investors are again facing a dilemma they have become well used to in recent years,” says Spooner.

“They need to choose between what will be cheap share valuations if Europe can resolve the current crisis and unknowable but potentially large risks if the situation continues to unravel.”