Market falls as confidence dips lower

Australian sharemarkets have cancelled out most of yesterday’s gains this morning, with resources and banking stocks leading the falls.

At 1pm the S&P/ASX200 is trading at 5149.4, down 2.6% from yesterday’s close. US markets also dropped heavily overnight, the Dow Jones Index closing down 2.36% to 12,099.66.

Two further signs of the weakening outlook for the Australian economy have emerged today. The Westpac–ACCI Survey of Industrial Trends for the first quarter of 2008 records business confidence at it slowest level in more than a year, while demand for new workers is also easing.

And new motor vehicle sales decreased by 2.3% seasonally adjusted in February after more than six months of strong upward growth. Close to 90,000 new cars were still bought last month, however.