The S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) has closed down 1.1% at 5,084.2, after the banks and resource shares were heavily sold off.
These four companies were amongst the biggest faller for the day…
Australia and New Zealand Banking Group (ASX: ANZ) sank 5.2% to $24.02, after the bank announced that its exposure to resources and related sectors would mean an additional $100 million in bad debt charges for this half of the 2016 financial year. Investors are clearly worried that this is the tip of the iceberg, and also that it might affect the other big four banks. In the past week, the big four banks have lost a combined $20 billion in paper value.
Gold miners St Barbara Ltd (ASX: SBM) and Saracen Mineral Holdings Ltd (ASX: SAR) both plunged, losing 8.2% to %2.01 and 7.7% to 89.5 cents respectively. Despite the falls, Saracen's share price is still up more than double from a year ago, while St Barbara shares are up 813%. Spot gold prices sank 2.2% overnight to US$1,220.42 an ounce, and hit a 3-week low, as the US dollar strengthens.
Investors have pointed out that rising US inflation may mean the US Federal Reserve may surprise markets and raise interest rates beyond the two upward moves it flagged last week. Should that happen, demand for the US dollar is likely to boom, and the gold price to sink.
Bendigo and Adelaide Bank Ltd (ASX: BEN) saw its share price fall 6.1% to $9.00, most likely as a result of the fallout from ANZ above. Smaller banks like Bendigo struggle to compete on similar terms to the big banks, thanks in part due to their lower credit ratings. While Bendigo may not be exposed to the resources sector as much as ANZ and its larger peers, it could see its bad debt charges rise thanks to exposure to associated industries that support, or are linked to, the resources sector.
