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Australian shares fall for second day on dropping oil

Australian shares fall for second day on dropping oil

WELLINGTON: Australian shares fell for the second day in a row, tracking weakness in Wall Street as tumbling oil and fears of Greece’s possible exit from the euro zone drove investors away from equities.

The S&P/ASX 200 Index and the broader All Ordinaries Index each lost 0.2 per cent, on Wednesday to 5353.6 points and 5334.5 points respectively as the energy sector lost 1.5 per cent.

Local shares took a weak lead from the United States and Europe, where major bourses sold off on Tuesday night after West Texas Intermediate crude oil prices fell below $US50 per barrel for the first time in almost six years. WTI is currently fetching $US47.76.

Heavy falls in energy producers led the share market’s falls on Wednesday as international ratings agency Moody’s is tipping that plummeting oil prices mean energy producers face a tough 2015.

Kumar Palghat, Kapstream Capital managing director said Aussie 10 year bonds yields are at record lows but are still attractive by international standards meaning they could easily push significantly lower still in 2015.

Australia’s biggest dedicated oil producer Woodside Petroleum fell 0.9 per cent to $36.14. Santos lost 1.3 per cent to $7.45 as Credit Suisse analysts said the company is theoretically worthless if current oil prices and the exchange rate persist.