Reuters: Hot Stocks: Australia shares down on China and euro zone worries; end the quarter stronger

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Australia shares down on China and euro zone worries; end the quarter stronger Mar 28th 2013, 06:20 Thu Mar 28, 2013 2:20am EDT (Adds details on stock movements, comments) SYDNEY, March 28 (Reuters) - Australian shares dropped 0.6 percent on Thursday, with both banks and miners taking a hit, in line with peers across Asia on fears of a potential run on Cyprus's banks. Sentiment also turned weaker after China, which is Australia's biggest trading partner, ordered banks to strengthen controls over wealth management products, highlighting the risks to its financial system. "Tightening in China for the rest of the year could be negative for the overall region and for equities," said Chris Weston, IG Markets' chief market strategist in Melbourne. The S&P/ASX 200 index lost 28.5 points to close at 4,966.5, according to the latest data. The benchmark ended the month 2.7 percent lower, the biggest decline in ten months, but was still 6.8 percent stronger for the quarter. For Europe, investors fear a stampede at Cypriot banks on Thursday, which reopen with tight controls imposed on transactions to prevent fleeing depositors from cleaning out the vaults in a catastrophic bank run. "Whatever is happening in Europe in terms of Cyprus and the ramifications of that, maybe a lot of traders just don't want to be long or don't want to have positions over this long weekend," said Winston Sammut, investment director at Maxim Asset Management. Big banks all lost ground, with Australia's No. 1 lender Commonwealth Bank of Australia ending 0.5 percent lower. Leading miners were weaker despite a rebound in iron ore prices. BHP Billiton Ltd lost 1.3 percent and Rio Tinto Ltd dropped 1.1 percent. The world's no. 3 gold producer Newcrest Mining dived 8.3 percent to a nearly 4-1/2 year low, after cutting its gold production guidance for the 2013 financial year. Still, IG Markets' Weston said the first quarter would be the strongest for 2013, given that valuations have shot up. "I will be looking to take profits on equity positions and see what happens in different macro-economic scenarios and look to buy at more compelling levels," he said. Consumer staples were weaker on Thursday, with Australia's biggest supermarket chain Woolworths Ltd losing 1.1 percent. Rival Coles-owner Wesfarmers Ltd fell 1.0 percent. Blood products maker CSL ltd bucked the trend and gained 0.4 percent, while the flagship telco company Telstra Corp Ltd declined 0.9 percent. Bluescope Steel Ltd, Australia's largest steel maker, jumped 2.9 percent after it started its $1.36 billion metal joint venture with Nippon Steel & Sumitomo Metal Corp after completing the sale of 50 percent of business. Agriculture chemicals company Nufarm Ltd plunged 17.2 percent to a 1-1/2 year low, after it posted disappointing H1 profits and gave a downbeat outlook on Monday. Linc Energy Ltd dived 12.4 percent to A$2.34, after it said it had raised A$200 million in a convertible bonds issue. The Australian market will be closed for the Easter holiday and resume next Tuesday, when the Reserve Bank of Australia meet to make its rate decision for April. All 22 economists polled by Reuters expect the central bank to keep interest rates unchanged at a record low 3.0 percent, waiting for further evidence that past cuts are indeed working to stimulate the economy. New Zealand's benchmark NZX 50 index clawed back and rose 0.2 percent to close at a record high of 4,422.8. (Reporting By Maggie Lu Yueyang; Editing by Sanjeev Miglani) Link this Share this Digg this Email Reprints

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