dj market comment

SYDNEY (Dow Jones)--The Australian share market was down sharply midday Monday amid broad-based weakness after Wall Street's Dow Jones Industrial Average fell 2.6% on Friday. But there was no sign of the panic that gripped Wall Street after weak corporate profits and outlook statements combined with high oil prices to generate fear of U.S. recession.

The benchmark S&P/ASX 200 index was down 137.7 points or 2.0% at 6570.0 around 0330 GMT after hitting a four-week low of 6542.9.

An institutional trader at a major European brokerage says he has seen more buying than selling, suggesting that bargain hunters are taking advantage of the fall.

"Obviously we've caught a cold from Wall Street, but while people are a bit cautious today, they are not saying the world's changed," said Justin Gallagher, head of sales at ABN AMRO.

BHP Billiton is down 3.0% at A$45.68, while Rio Tinto is down 3.5% at A$105.79.

Newcrest is down 4.0% at A$28.73 after spot gold hit a four-day low of US$753.10, following Friday's rise to a 28-year high of US$770.0.

Macquarie Bank is down 4.0% at A$79.69 due to its sensitivity to the stock market.

Major banks are falling in line with the broad market, with Westpac down 2.0% at A$28.13.

ABN AMRO's Gallagher says more short-term weakness is possible, but he doesn't expect the fall to last more than a few days or push the index down more than a few percent from the record high of 6800 struck last week.

He says the negative issues are mainly U.S.-centric, with strong Chinese and domestic growth expected to continue insulating the Australian market from U.S. recession fears.