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Australian Market Sharply Lower

The Australian stock market is sharply lower on Tuesday following the overnight plunge on Wall Street, where the benchmark S&P 500 as well as the Dow Jones Industrial Average suffered their biggest percentage drops since 2011. Worries about rising bond yields and potentially higher interest rates continue to weigh on markets.

In late-morning trades, the benchmark S&P/ASX 200 Index is declining 174.00 points or 2.89 percent to 5,852.20, off a low of 5,841.50 earlier. The broader All Ordinaries Index is down 177.90 points or 2.90 percent to 5,950.50.

The big four banks - ANZ Banking, National Australia Bank, Westpac and Commonwealth Bank - are losing a range of 2.6 percent to 3.4 percent.

Shares of Magellan Financial Group are down more than 6 percent after the fund manager reported a 25 percent increase in first-half underlying profit, while net profit fell 38.6 percent. The company also said it has acquired U.S.-based Frontier Partners and Australian equities specialist Airlie Funds Management.

Macquarie Group said it expects an about 10 percent increase in full-year profit compared to last year's record A$2.2 billion. The company's shares are lower by more than 5 percent.

In the oil sector, Santos is lower by almost 5 percent, Woodside Petroleum is declining almost 4 percent and Oil Search is down more than 3 percent as crude oil prices fell overnight.

The major miners are also weak. Fortescue Metals is declining almost 1 percent, Rio Tinto is lower by more than 1 percent and BHP Billiton is losing almost 3 percent. Pilbara Minerals is falling more than 3 percent.

Gold miners are mixed. Newcrest Mining is down 0.4 percent, while Evolution Mining is adding 0.2 percent after gold prices also fell.

In the currency market, the Australian dollar continued to decline against the U.S. dollar. The local unit was quoted at US$0.7882, down from US$0.7936 on Monday.

On Wall Street, stocks suffered one of their worst days in recent memory on Monday, as markets continued to throw a tantrum over rising interest rates. The sell-off overshadowed any corporate headlines. Markets also ignored some upbeat economic news.

The Dow Jones Industrial Average fell 4.6 percent or 1,175.21 points to 24,345.75, while the S&P 500 fell 4.1 percent or 113.19 points to 2,648.94 and the Nasdaq Composite Index fell 273.42 points or 3.8 percent to 6,967.53.

The European markets ended firmly in negative territory on Monday. The DAX of Germany dropped 0.76 percent, the CAC 40 of France fell 1.48 percent and the FTSE 100 of the U.K. declined 1.46 percent.

Crude oil prices fell sharply on Monday along with global stocks as the U.S. dollar rallied on expectations of interest rate hikes. WTI crude fell $1.30 or 2 percent to $64.15 a barrel on the New York Mercantile Exchange.

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