Australian Mining Tax Hits Global Markets

Source:

"Brokers worry Australia's tax move might cause other mining countries to follow suit."

The federal government's plans to impose a new tax on Australian miners have hit global share markets and the local dollar.

London's FTSE 100 closed 2.6% lower in its first trading session since the Rudd government announced its tax plans.

London-listed shares in BHP Billiton shed nearly 8%, Rio Tinto shares lost more than 6% and BG Group, which has a gas project in Queensland, lost more than 4%.

Some brokers say they are worried Australia's tax move might pave the way for other mining countries to follow suit.

Concerns about the mining tax added to fears for the financial health of Europe.

In Greece, demonstrators stormed the Acropolis in Athens ahead of a general strike against austerity cuts, as the euro plunged and stock markets tumbled on concerns the rescue package for Greece will not be sufficient.

European Union leaders were hoping the weekend's promise of a $160 billion international rescue package would restore investor confidence, but many are skeptical Greece can address its longer-term problems.

There are also concerns that Spain is preparing to ask for a bailout, but the country's prime minister has dismissed such talk as "absolute madness."

Stocks plunged 5% on Spain's key index, while in Frankfurt the DAX shed 2.6%. In Paris, the main index lost 3.6%.

The concerns about Europe also hit New York, where stocks erased yesterday's solid gain to post their worst fall in three months.

At the closing bell, the Dow Jones Industrial Average was down 225 points to 10,927. The NASDAQ composite was down more than 74 points, or nearly 3%. The broader Standard and Poor's 500 index lost 29 points. Spot gold was worth $US1,171.93/oz.

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