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Banks to pass on rate cuts.

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RN PM Banks to pass on rate cuts


MARK COLVIN: Now to a look at today's business and finance with Brigid Glanville.


Well just after the interest rate announcement this afternoon the major banks all announced what they'll be passing on.

The Commonwealth Bank and the National Australia Bank will both pass on the rate cut in full. Westpac is reducing its rate by 80 basis points. ANZ dropped its 83 basis points.

Those banking stocks though took another belting on the share market after Wall Street fell overnight on the back of the news the US may have been in a recession for a year. The Commonwealth and Westpac both lost five per cent. The National fell 3.6 per cent and ANZ also dropped three per cent.

The All Ordinaries today fell four per cent.

Metcash, the grocery wholesaler, says sales are holding up and it plans to expand its house brands as consumers chase value in the tighter economic conditions. Metcash recorded a first half profit of $80-million and said it expects sales to remain steady for the rest of the year. Metcash shares rose 3.7 per cent to $4.15.

Mining stocks continued to plunge today. BHP Billiton lost nearly 10 per cent, now that's on top of yesterday's 3.6 per cent loss. Its shares are at $27.03. Rio Tinto is down 8.6 per cent to $39. That's the lowest price since January 2005.

Oil prices fell today and so did energy stocks. Woodside slumped ten-and-a-half per cent to $32.41.

There are media reports out today that investment bank Macquarie will sack 10 per cent of its trading workforce as the company seeks to cut costs. Macquarie Bank's shares fell 13 per cent to $26.21.

Well Christmas may be bringing some cheer to retailers. Retail sales for October rose 0.7 of a per cent.

Harvey Norman's November monthly sales rose half a per cent and Harvey Norman shares were up throughout the day but closed one per cent lower. David Jones closed five per cent higher, to $2.70.

Electrical Retailer though JB Hi Fi dropped six per cent to $7.88.

The ASX 200 fell 153 points or four per cent to 3,528.

Gold is fetching US$767 an ounce. Oil is worth US$49 a barrel. And a short time ago, the Australian dollar was trading at 63.5 US cents.

MARK COLVIN: Brigid Glanville.

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