Australian uranium stocks plunged for a second straight day amid heightened fears of a nuclear meltdown in Japan following last week’s earthquake and tsunami.
Another explosion at the Fukushima reactor, 220km from the nation’s capital, prompted Japanese Prime Minister Naoto Kan to warn that substantial amounts of radiation were leaking in the area, triggering waves of panic selling across global financial markets.
“There’s just so much uncertainty. Nobody bar a few nuclear experts actually know what’s happening, which is the scary thing,” IG Markets market strategist Ben Potter said.
“Some reports are saying winds could blow low level radiation into Tokyo in 10 hours, while others dismiss the fact.
“Either way, the world’s worst nightmare could be unfolding.” CMC Markets sales trader Ben Taylor said speculation that a nuclear cloud was floating towards Tokyo city had terrorised the markets.
“Further rumours of another flash crash coming has seen value thrown out the window as panic selling sets in across world equity markets,” Mr Taylor said.
Investors sold out of Australian uranium stocks in droves as today’s trading session ground on amid a greatly weakened outlook for the sector.
Shares in Rio Tinto Ltd-majority owned Energy Resources of Australia Ltd (ERA), the world’s fourth largest uranium producer, plunged to a more than six-year low after dropping 12 per cent on Monday.
ERA was down $1.18, or 14.3 per cent, at $7.07, its lowest since January 2005.
Africa-focused uranium miner Paladin Energy Ltd also continued to slide after slumping more than 16 per cent on Monday.
Paladin was down 69 cents, or 17.47 per cent, at $3.26, its lowest since mid-March last year.
Among junior uranium explorers, Peninsular Energy Ltd was down 30.59 per cent at 5.9 cents, Energy and Minerals Australia Ltd backtracked 26.3 per cent to 14 cents, Extract Resources Ltd shed 18.45 per cent to $8.00, Toro Energy Ltd dropped 19 per cent to 8.1 cents and Energia Minerals Ltd was 15 per cent weaker at 17 cents.
Even other forms of energy such as coal and conventional hydrocarbons were not spared.
Oil and gas giant Woodside clawed back some earlier losses to close down 1.47 per cent at $41.58, while coal miner Macarthur Coal Ltd finished down 2.72 per cent at $10.36.
Rio Tinto Ltd’s Coal and Allied recovered well after reaching a low of $111.04 to finish at $114, down 80 cents, or 0.7 per cent.
Many analysts were loathe to describe the sell-off as a buying opportunity, as it could turn into a full blown stock market rout. However, others were not so circumspect.
“When you see BHP down 10 per cent in a couple of weeks, no matter what you think, that has got to be good value,” Austock Securities senior client adviser Michael Heffernan said.
BHP Billiton, which operates one of Australia’s three uranium mines and also has substantial petroleum assets, finished down 2.54 per cent at $42.97. Mr Potter described picking the right time to snap up bargains as “like trying to catch a falling knife”.