Reuters: Hot Stocks: Australia shares slip 0.4 pct on profit-taking; cyclicals hit

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Australia shares slip 0.4 pct on profit-taking; cyclicals hit Mar 1st 2013, 06:03 Tweet Share this Email Print Fri Mar 1, 2013 1:03am EST (Adds details, comments) SYDNEY, March 1 (Reuters) - Australian shares closed 0.4 percent lower on Friday, dragged down by a sell-off in cyclical stocks as investors took profits from a recent rally. The market still ended the week 1.4 percent higher, and it has gained 9.4 percent this year thanks to reduced concern over the global economy. A strong earnings season has also encouraged investors. "The fundamentals look supportive of the Australian share market overall," said CMC Markets chief market strategist Michael McCarthy in Sydney. Noting that traders were looking for a "healthy correction", McCarthy said it's not uncommon to see a significant pull-back before the market goes higher later. Resource stocks were hit the most on Friday, with BHP Billiton Ltd down 0.6 percent and Rio Tinto Ltd 1.5 percent lower. The benchmark S&P/ASX 200 index lost 18.0 points to 5,086.1, according to the latest data. It jumped 1.3 percent on Thursday to its highest close since September 2008. China, Australia's biggest resources buyer, said on Friday its official purchasing managers' index (PMI) for February was at its slowest pace in months at 50.1, slightly below a 50.2 Reuters poll consensus and the 50.4 posted in January. The data dented the Australian stock market initially but the impact faded quickly, as investors digested the broadly-in-line figures. Investors were also uncertain about the U.S. budget cuts, which would kick in on Friday as the White House and Republicans failed to reach a last-ditch deal to prevent $85 billion in cuts across federal agencies. "There is always supposed to be a threat more than anything else, it seems to be coming into reality now," said Chris Weston, an institutional dealer at IG Markets in Melbourne, noting the cut would affect U.S. employment and growth. Most big banks managed to hold the ground, led by a 0.9 percent gain in Commonwealth Bank of Australia. Australia and New Zealand Banking Group dipped 0.4 percent. Defensive stocks were weaker, with the country's flagship telecom company Telstra Corp Ltd dropping 1.3 percent. Television group Ten Network Holdings Ltd soared 9.1 percent to a six-month high, after media reported rival Seven Group Holdings Ltd 's boss Kerry Stokes had built up a A$40 million stake in it. New Zealand's benchmark NZX 50 index slipped 2.0 points lower to 4,318.0. (Reporting by Maggie Lu Yueyang; Editing by Richard Borsuk) Tweet this Link this Share this Digg this Email Reprints Comments (0) Be the first to comment on reuters.com. Add yours using the box above.

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