Reuters: Hot Stocks: Euro zone fears hit Australian shares as Italy heads for deadlock

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Euro zone fears hit Australian shares as Italy heads for deadlock Feb 26th 2013, 01:11 Mon Feb 25, 2013 8:11pm EST (Adds details, comments, stocks on the move) SYDNEY, Feb 26 (Reuters) - Australian shares lost 0.8 percent on Tuesday after Wall Street suffered its biggest fall since November over worries of renewed instability in the euro zone following Italian elections which appeared poised to return a deadlocked parliament. A huge protest vote by Italians enraged by economic hardship and political corruption left no coalition strong enough to form a government following Monday's election. "There's an argument going on among traders at the moment. Was the Italian election result a cause or an excuse for something the market wanted to do?" said Michael McCarthy, chief market strategist at CMC Markets. "Because the market has run so hard we were due for a pull back." The financials dragged on the index, with top lender the Commonwealth Bank of Australia posting the biggest loss of 1.1 percent. Global iron ore miners BHP Billiton Ltd and Rio Tinto Ltd lost 1.3 percent and 1 percent respectively. Port terminals used by both miners have been shut as a cyclone bears down on the iron-rich Pilbara region of Western Australia. The benchmark S&P/ASX 200 index was 42.7 points lower at 5,014 at 0044 GMT, trimming losses from earlier in the session. "Twice now the pullback has respected the key break out level of 4,976, this morning's low of 4,978 is within a whisker of that," said McCarthy. "But the fact that we've been able to bounce off it and hold above indicates to me that the underlying strength in the market remains." The resistance levels are at 4,976 and 5,025 points, he said. "[They are] the previous levels the market had failed at. When the market trades through a resistance level, it becomes a support level." Gold miners underpinned the market, Newcrest Mining jumped 2.4 percent while rival gold producer Medusa Mining soared 5.8 percent. The bullion rose about 1 percent on Monday, extending to a third day of rallies, as a sharp pullback in U.S. equities and uncertainty over the outcome of Italy's election led to resurgent safe-haven buying. U.S. stocks fell on Monday, reversing course from earlier gains as the elections in Italy stoked concerns for the euro zone's stability. New Zealand's benchmark NZX 50 index slipped 0.3 percent or 12.5 points to 4,213.9. STOCKS ON THE MOVE * QBE Insurance lost 2.8 percent to A$12.66 after the insurer reported an 8 percent rise in net profit to $761 million. (0042 GMT) * Whitehaven Coal Ltd dropped 2.2 percent to A$2.935 after the miner reported a first-half loss on Tuesday, whacked by weak coal prices and a strong Australian dollar, but said it is back on track to start construction of its key growth project in mid-2013. (0042 GMT) * Seven Group Holdings added 2.2 percent to A$10.27. The media company reported a 47 percent rise in first-half profit before one-offs to A$234 million, underpinned by its WesTrac mining equipment business. (0042 GMT) * Origin Energy fell 2 percent to A$11.65. The gas and energy utility announced a $200 million agreement to sell an additional portion of its oil and condensate production. (0043 GMT) * Virgin Australia Holdings Ltd fell 4.1 percent to A$0.42. The airline carrier posted a H1 revenue of $2,106 million but cited uncertainty in economic conditions and a competitive environment as obstacles to growth. (0043 GMT) * Atlas Iron dropped 4.4 percent to A$1.53 after it reported a first-half underlying profit of A$1 million and said talks on building or accessing a rail line for its planned iron ore expansion were progressing. (0043 GMT) * Ramsay Health Care fell 0.8 percent to A$30.35. The private hospital operator reported a 12 percent rise in core net profit to A$148.2 million and raised full-year guidance for core profit growth to 13 percent to 15 percent from its previous guidance of 10 percent to 12 percent. (0043 GMT) (Reporting by Thuy Ong; Editing by Stephen Coates) Link this Share this Digg this Email Reprints

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