Local stocks were deeply in the red on Wednesday as fears about US economy intensified following a multi-billion loss announced by Citigroup overnight and more capital injections for it and Merrill Lynch.
The benchmark S&P/ASX 200 index fell by as much as 2.9% or 172.8 points during intraday trading to 5787.20 before recovering to 5809.70, although still down 150.30 points from the previous day's close.
All Ordinaries Index was down by 149 points at 5870.80
Just like the US retail sales figures recorded a slide, so did Australian consumer confidence levels after figures released on Wednesday showed a fall of 8.3% (since December) in consumer sentiment.
The figure released by the Westpac-Melbourne Institute Consumer Sentiment Index show sentiment has fallen 5.9 % since January 2007.
The decline reflects the threat of higher interest rates and petrol prices and the news didn't help the retail sector.
Shares in JB Hi-Fi fell 60 cents or 4.72% to $12.10, David Jones was down 8 cents at $4.79, Woolworths lost $1.19 or 3.6% to $31.94 and Wesfarmers lost $1.21 to $37.24
The major banks were also all in red, as investors drastically re-assess their growth prospects. Formerly seen as defensive investments, banks no longer offer a safe haven.
Commonwealth Bank lost $2.24 to $52.71, ANZ slid 19 cents to $25.90, National Australia Bank lost $1.06 to $34.74, and Westpac fell 41 cents to $25.41.
Shares of Rio Tinto fell by $3.74 to $122.96. BHP Billiton was down $1.19 to $37.52.
Gold miners Lihir fell 23 cents to $3.76, Newmont Mining slid 5 cents to $6.27 and Newcrest lost $1.35 to $37.50.
Following the lead of Wall St, Asian stocks plummeted also, amid fears of recession in the world's biggest economy.
