The Australian share market suffered a widespread sell-off this morning, as investors digested the double-whammy of lower commodity prices and credit ratings downgrades for Greece and Portugal.
At 1200 AEST, the benchmark S&P/ASX200 index was down 67.9 points, or 1.39 per cent, at 4,812.1 points, while the broader All Ordinaries index had slipped 70.3 points, or 1.43 per cent, to 4,843 points.
On the Sydney Futures Exchange, the June share price index futures contract was 66 points lower at 4,818 points on volume of 21,739 contracts.
CMC Markets senior dealer Matt Lewis said the sell-off was across the board on the back of plunging US and European markets overnight, and on concerns that China might take further steps to curtail economic growth.
"People have been looking for reasons for the market to decline," Mr Lewis said.
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"We've seen a lot more trading from the short side and the (global sell-off) has followed on to our market."
CMC Markets expected the Australian market to trade between 4,700 and 4,900 points over the short term. "There is not a lot of conviction on the buy side," Mr Lewis said.
US, European markets plunge
Wall Street and European markets plunged overnight after Standard & Poor's downgraded the credit ratings of Greece and Portugal, where debt problems have been a concern for investors for months.
The Dow closed down 213, or 2 per cent, at 10,991.
The Standard & Poor's 500 index closed down 28, or 2.3 per cent, at 1,183. And the Nasdaq composite index is off 51, or 2 per cent, at 2,471.
In London, the FTSE 100 index closed down 2.6% with most of the losses following S&P's downgrade of Greece.
Germany's Dax index slid 2.7% and the French Cac-40 lost 3.8%
'Junk' level
The downgrade makes Greece the first eurozone member to have its debt downgraded to junk level.
Portugal's debt was also lowered on fears of "contagion", adding to the markets' rout and a fall in the euro.
Germany immediately said it would not "let Greece fall", and there were signs that an aid package could be increased.
Greece wants 40bn euros (£34bn) from eurozone governments and the International Monetary Fund (IMF) to shore up its finances.
Greece's finance ministry said in a statement that the downgrade "does not correspond with the real data of the Greek economy."
Euro leaders to debate Greece aid on May 10
European leaders are set to meet in Brussels on May 10 in a bid to agree a 30-billion-euro rescue package for Greece, a Spanish EU presidency source told AFP.
The leaders will vote on the plan, Dow Jones Newswires reported, citing a written note from the German government to the parliament seen by a source.
Greece has stressed that it needs the money by May 19 at the latest in order to remain solvent and some analysts have warned the country could default.
The date is significant because it falls the day after a key German regional election seen as a significant obstacle for Chancellor Angela Merkel, the biggest potential contributor to the Greek bailout.
Portugal hits back at 'market attack'
Meanwhile, the Portuguese government angrily denounced an "attack from the markets" after its credit rating was downgraded and rejected any comparison to the debt crisis in Greece.
"It is a decisive moment. The country must respond to this attack from the markets," Finance Minister Fernando Teixeira dos Santos said in a statement.
"We must remain calm and bring serenity back to the markets," he said.
S&P cut Portugal's long-term credit rating to "A-" from A+" and its short-term rating to "A-2" from "A-1," adding that the outlook was negative due to the country's fiscal and economic structural weaknesses.
The downgrade helped drag down the Lisbon stock exchange by more than five percent, while the interest rate demanded by investors to hold Portuguese debt -- the bond yield -- rose to more than 5.6 percent.
Aussie miners down
Australia's major miners suffered heavy falls with BHP Billiton down 95 cents, or 2.26 per cent, at $41.05, and rival Rio Tinto plunging $1.81, or 2.37 per cent to $74.59.
Woodside Petroleum lost 75 cents, or 1.61 per cent to $45.70, while competitor Santos was down 24 cents, or 1.73 per cent, at $13.63, and Oil Search fell eight cents, or 1.38 per cent, to $5.71.
The local lenders also suffered heavy falls after US financial stocks fell 3.4 per cent overnight.
ANZ Banking Group lost 39 cents, or 1.55 per cent, to $24.78, while Commonwealth Bank gave up 72 cents, or 1.24 per cent, to $57.43, Westpac fell 25 cents, or 0.92 per cent, to $26.93, and National Australia Bank was down 39 cents, or 1.47 per cent, at $28.40.
