Reuters: Hot Stocks: Australia shares fall on sinking iron ore; strong jobs startle

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Australia shares fall on sinking iron ore; strong jobs startle Mar 14th 2013, 06:41 Thu Mar 14, 2013 2:41am EDT (Adds details, comments) SYDNEY, March 14 (Reuters) - Australian shares fell 1.2 percent on Thursday, the biggest percentage loss in eight days, with miners hit hardest by sinking iron ore prices with the market startled by an unexpectedly strong jobs report that reduced chances for a central bank rate cut in interest rates. The market accelerated its fall right after Australia's statistics office published the jobs data at 0030GMT, showing employment soared by 71,500 in February, a wholly unforseen jump above any forecast and the biggest increase in over a decade. The strong jobs figures were seen as almost ruling out any cut in interest rates before the middle of the year, analysts said. "Such strong unemployment data reduces the chances of seeing the RBA (central bank) pull the trigger on rates anytime soon. This in turn weighs on some interest-rate-sensitive and exchange-rate-sensitive stocks," said Stan Shamu, a market strategist at IG Markets based in Melbourne. "Despite the extremely robust jobs report...we'll see the local labour market data deteriorate over the year," he added, noting many analysts do not believe the strength in employment numbers will last. CMC Markets chief market strategist Michael McCarthy in Sydney commented: "Good economic news can lend bad news for markets...the interest bias goes now from easing to neutral. "Without further prospect of rate cuts to spur the market higher, we are seeing some investors taking profits." The S&P/ASX 200 index dropped 60.2 points to 5,032.2, according to the latest data. It fell 0.5 percent on Wednesday. The market has enjoyed a bull run since November last year and has risen 8.5 percent this year on a strong earnings season and an improving outlook for the global economy. Mining stocks were hit hardest in Thursday's falls -- iron ore prices sank more than 3 percent overnight to their lowest levels for the year, pressured by weak steel demand in top consumer China. Both BHP Billiton Ltd and Rio Tinto Ltd slid 2.3 percent, and Fortescue Metals Group, the world's No. 4 iron ore producer, dived 6.2 percent. Financials continued their losing track. Westpac Banking Corp fell 1.2 percent, the biggest decliner among the big four banks. Australia's top department store Myer Holdings Ltd jumped 5.9 percent to a 22-month high, after it posted better-than-expected first half earnings. Consumer staples retreated, with Coles-owner Wesfarmers Ltd dropping 1.0 percent and rival Woolworths Ltd inching down 0.4 percent. Australia's struggling TV network Ten Network Holding plunged 6.8 percent, amid growing concerns over the government's plan to revamp media laws, which might impose more restrictions on media ownership. New Zealand's benchmark NZX 50 index rallied 0.9 percent, reaching an all-time close high of 4,381.1, after the Reserve Bank of New Zealand said it expected to keep interest rates at a record low in 2013. (Reporting by Maggie Lu Yueyang; Editing by Eric Meijer) Link this Share this Digg this Email Reprints

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