Australian stocks close 1.56pc lower

SYDNEY: Australian stocks fell 1.56 percent on Friday in a seesawing session that saw them briefly trade in positive territory despite a rout on Wall Street as fears of recession grip global markets.

At the close, the benchmark S&P/ASX 200 was down 61.7 points at 3,903.2.

"The big talking point was the sharp move higher in the market around lunchtime," said IG Markets dealer Chris Weston.

"The question traders had been asking themselves was: 'Is this genuine buying or merely short covering after a torrid week'?

"There are a lot of value-minded investors who really feel that the market has discounted a lot of bad news and is ready to push towards 4,000 in the short term and rightly so," he added.

Some of Australia's biggest blue chips were sold off, with BHP Billiton down 3.03 percent, following a four percent loss on Thursday.

Fellow miner Rio Tinto was down 3.76 percent, adding to its six percent fall the previous day, although Commonwealth Bank was one of the few to end in the green, up 0.93 percent.

The commodities-linked Australian dollar was also sharply lower, slumping more than two US cents as concerns over the US economy caused a global sell-off.

Late in the session, the Aussie was at 97.64 US cents, well down on its close of 100.18 cents on Thursday.

Copyright AFP (Agence France-Presse), 2011