Source Pravda.Ru

Australia: Worldcomm trouble down under

Australian stocks are likely to lose ground after markets around the world tumbled overnight in response to the WorldCom accounting scandal.

Compounding existing concerns about corporate accounting in the wake of Enron, the long distance carrier revealed early on Wednesday morning AEST that its earnings had been overstated for the past five quarters by about $US3.8 billion ($A6.67 billion).

The company immediately fired its chief financial officer and announced plans to cut some 17,000 staff starting this Friday.

Australia's share market, one of the first in the world to trade after the news broke, shed 1.5 per cent yesterday.

The benchmark S&P/ASX 200 index ended 47.9 points lower at 3179.4, the lowest close since October 20 last year, while the all ordinaries lost 47.0 points at 3129.7.

Henry L. Marconi PRAVDA.Ru Sydney