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$23 billion wiped off market

The S&P / ASX 200 Index (Index: ^AXJO) (ASX: XJO) has dropped by 1.5%, closing below the 5,000 level at 4,964.3 and losing $23 billion in value in the process. Today’s fall follows yesterday’s drop of 2%, as global markets were hammered overnight. Worries over global growth have raised their head, and mixed messages from the US Federal Reserve on quantitative easing appears to have affected investors’ confidence. The only sector keeping its head above water was gold.

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Echo Entertainment Group (ASX: EGP) has lost 12% to close at $3.03, after James Packer’s Crown dumped its 10% shareholding in the company. Investors may have expected Crown to launch a takeover bid at some stage, but that appears to have flown out the window, along with any takeover premium built into Echo’s share price. Investors may also see Crown becoming a direct competitor with Echo’s The Star casino, if the NSW government approves Packer’s plans for a VIP gambling operation at Barangaroo, on Sydney’s waterfront.

iiNet Limited (ASX: IIN) lost 8%, ending at $5.61. The junior internet service provider was hammered, along with the rest of the telco sector. Telco stocks, with their defensive qualities and relatively high yields have been in big demand over the past two years, which has seen their share prices soar, making them vulnerable to a pull back. Brokers have also been downgrading telco stocks after the price run up, which may have contributed to recent falls. Despite today’s falls, iiNet shares are still up more than 80% in the past year.

Fleetwood Corporation (ASX: FWD), the temporary accommodation and caravan maker, has seen its shares sold off for the fourth consecutive day. Shares fell 8.9% to close at $4.42, and are now down more than 50% in the past 10 days. Fleetwood is heavily reliant on the resources sector for revenue, and recently downgraded its profit forecast, as projects are cancelled and miners cut back on the spending. The company is also being hit by cautious consumers unwilling to lash out on big capital items like caravans.

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