Shares in Australian retailers were smashed as Australian shares plunged at today’s opening, shedding $56 billion within minutes. As the market overall fell 4.4% the share value of Harvey Norman slipped 6.40% while David Jones slipped a massive 6.76%.JB Hi Fi went down 4.57% while Woolworths (the owners of Dick Smith) and Wesfarmers (the owners of Officeworks) dropped less than 2%.
Woolworths dropped 1.6% while Wesfarmers, the owner of Coles dropped 1.7%
Shares fell 4.4% on the All Ordinaries Index, or 192.3 points, to a two-year low of 4160.6. The losses add to the $65 billion last since Tuesday.
”We’re seeing a total collapse of confidence,” Brisbane-based fund manager Peter Wright of Bizzell Capital Partners told Fairfax Media. ”Three big selloffs in a row like this haven’t been seen since the GFC.”
As the market heads for a perfect storm following the overnight collapse of shares in London and on Wall Street, retailers are now facing a bleak second half as consumers hold onto their savings.
US stocks plunged more than 4 per cent this morning and every key index in Europe shed more than 3 per cent as fears of a fresh global economic downturn stalked trading floors on both sides of the Atlantic.
The rout on Wall Street saw the Dow Jones close down more than 4.3 per cent – its worst one-day drop since February 2009 – while the tech-heavy Nasdaq plunged more than 5.1 per cent.
“Locally, it’s going to be a horrendous session…with all sectors expected to get smashed,” Melbourne-based IG Markets strategist Ben Potter told the Australian newspaper.
“It’s going to be a very ugly end to an even uglier week, with the first hour of trade likely to see large amounts of forced selling as participants are forced to meet margin calls. After that, hopefully, things will stabilise a little and we can tread water into the close.”
The fact that Harvey Norman appears to be stalling the announcement of their latest results is not a good sign.
Today the shares hit a new 52 week low of $1.92 as the company again failed to announce 4th quarter and 2011 financial year sales.
Yesterday the retailer was singled out by the productivity commission for selling products up to 50% dearer than the cost of the same products on overseas web sites.
In recent weeks Harvey Norman had a falling out with long time partner Logitech with some observers now questioning whether Harvey Norman is the place to go to buy discounted consumer electronics and IT gear.
More to follow.
