Australian shares slumped to their heaviest loss in four weeks as institutional traders closed the books on the best year in a decade.
The ASX 200 dived 121 points or 1.8 per cent to 6684 during a holiday-shortened trading session. The market is closed tomorrow and reopens on Thursday.
A second day of broad-based selling took some of the shine off the best annual return since the GFC. The benchmark index tallied 18.4 per cent this year, its strongest gain since a 30.8 per cent surge in 2009.
Local investors took their cues from Wall Street, where traders locked in gains on this year's best performers. The S&P 500 shed 19 points or 0.58 per cent.
The tech sector has been one of the year's best ASX performers, rising more than 32 per cent as investors bought into the so-called 'WAAAX' group of sector leaders. The sector dived almost 3 per cent today as profit-takers stripped 5.5 per cent off Wisetech, 4.2 per cent off Appen, 3.9 per cent off Altium, 2.8 per cent off Afterpay and 2.4 per cent off Xero.
The big two supermarkets hit record levels last month, but have been in retreat since strong jobs data dimmed the prospects for further rate cuts next year. Coles sagged 3.3 per cent today, Woolworths 3.4 per cent. Metcash slipped 3 per cent.
Health stocks have also had a stellar year, rising 41 per cent, propelled by record highs in CSL, Sonic Healthcare and Cochlear. Today CSL shed 2.2 per cent, Sonic 2.5 per cent and Cochlear 3.5 per cent. Telstra dipped 2.75 per cent to a five-week low.
The handful of stocks that scraped wins on the index were mostly defensive gold stocks. Gold Road Resources put on 3.1 per cent, Evolution Mining 2.4 per cent, Resolute 2 per cent and Newcrest 0.6 per cent.
The big four banks lost between 0.7 and 1.5 per cent. BHP dropped 1.3 per cent, Rio Tinto 1.2 per cent.
The day's only significant economic report came in broadly in line with expectations. China's December manufacturing purchasing managers' index held steady at 50.2. Economists had predicted a modestly weaker reading of 50.1.
The Shanghai Composite dipped 0.1 per cent, Hong Kong's
Hang Seng 0.6 per cent. Trade on Japan's Nikkei was suspended for a public
holiday. S&P 500 index futures were recently up four points or 0.1 per
Brent crude futures gained 24 cents or 0.4 per cent this morning at $US68.40 a barrel. Gold rallied $5.50 or 0.4 per cent to $US1,524.10 an ounce.
The dollar rose a tenth of a cent to 70 US cents.
What's hot today and what's not:
Hot today: heavy mineral sands are an increasingly valuable commodity used in everything from transistors to tin cans to nuclear reactors. MRG Metals has been one of this year's speculative success stories after aircore drilling confirmed the potential of its Koko Masava heavy mineral sands project in Mozambique. The company intends to release further assay results early next month. The share price has tripled since the first results and this morning rallied 15 per cent to 2.3 cents.
Not today: a year to forget for investors in coal developer Prairie Mining took another nasty twist after the company revealed a Polish company appears to have stolen a march on a key part of Prairie's planned Jan Karski Mine. Polish firm Lubelski Wegiel Bogdanka issued a press release claiming it has been awarded the rights to mine within Prairie's Lublin concession in Poland. Prairie is locked in a feud with the Polish government over the government's alleged breaches of treaties. The government has so far declined to participate in discussions to resolve the dispute. Prairie shares tanked 13 per cent today to a four-month low.