The local sharemarket dropped below 7000 points, with the S&P/ASX 200 closing 93.9 points lower at 6923.3 points. The energy sector was the worst performer, declining 4 per cent as Worley Parsons dropped 8.5 per cent to $13.95, and Oil Search slumped 7.2 per cent to $6.72 after the Papua New Guinea government walked away from talks with its joint venture partners Exxon and Total over LNG expansion plans in the country, threatening a broader $20 billion gas export program. Perenti Global sank 6.2 per cent to $1.44 and NRW Holdings fell 5.7 per cent to $2.95.
The materials sector declined 2.2 per cent, with BHP falling nearly 3 per cent, Rio Tinto sliding 1.9 per cen and Fortescue Metals closing 3.4 per cent lower at $11 after falling to $10.81 during the opening sell-off. However, gold miners were higher as the safe-haven metail hit $US1590, or $2382, per ounce.
Shares in Oil Search dropped 7.2 per cent on concerns its gas field activities in Papua New Guinea are at risk.
There was also a 6.7 per cent decline in IDP Education, which offers education services to many Asian students studying in Australia, UK, Canada and the US. Australian universities are facing a ‘worst case scenario’ of a temporary ban on students arriving from mainland China coinciding with the start of the academic year.