$38b share market slide led by major bank slump

Sydney : More than $38 billion was wiped off the value of Australian stocks on Friday, led by ANZ’s worst one-day share plunge since the global financial crisis.
ANZ shares slumped 7.5 per cent to $30.14 after the bank on Thursday tapped shareholders for up to $3 billion in extra funds.It set a minimum price of $30.95 a share, and that is all the bank got.The lack of enthusiasm from big institutional investors, and a surprise increase in bad debt provisions, were behind Friday’s plunge.The Commonwealth Bank was also down almost 4 per cent, but if Thursday’s more than 3 per cent slide is added in, it has been hit just as badly by ANZ’s capital raising as ANZ has.That is because the Commonwealth delivers its annual profit report next week and analysts are expecting an even bigger capital raising than ANZ.Westpac also has not tapped its shareholders yet to increase its reserves against potential home loan losses, and it fell 3.3 per cent in anticipation that it soon would.National Australia Bank has already raised $5.5 billion dollars in May, but investors are worried it might need more – it dropped 2.3 per cent.With the financial sector making up almost half of Australia’s share market value, the benchmark ASX 200 closed down 2.4 per cent at 5,475.The broader All Ordinaries fell a slightly smaller amount to 5,472.While the banks weighed most on the market, explosives maker Orica had the biggest fall, plunging 17 per cent.The company made a $1.65 billion write-down to its asset values and downgraded its profit forecasts by 10 to 15 per cent.Resources firms also did not help the market, with BHP Billiton off nearly 3 per cent and Rio Tinto down 0.5 per cent.On commodity markets, iron ore futures were down nearly 2 per cent around 5:00pm (AEST).The benchmark Brent crude oil price was down again overnight to $US48.14 a barrel.However, spot gold was a little higher at $US1,095 an ounce.