Reuters: Hot Stocks: Australian shares suffer biggest 1-day loss in a month; weak commodities hit miners

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Australian shares suffer biggest 1-day loss in a month; weak commodities hit miners Apr 18th 2013, 07:19 Thu Apr 18, 2013 3:19am EDT (Adds details, comments) SYDNEY, April 18 (Reuters) - Australian shares fell 1.6 percent on Thursday, the biggest one-day percentage loss in a month, as increased worries about global growth and demand for the resource-rich nation's raw materials took a heavy toll on mining stocks. Global miner BHP Billiton sank 4.4 percent to a nine-month low of A$30.65, while rival Rio Tinto Ltd tumbled 4.6 percent to close at a seven-month low of A$52.07. The sharp decline in miners follows the recent rout in commodities markets stemming from global growth concerns. London copper dropped as much as 4 percent on Thursday to below $7,000 a tonne for the first time since October 2011, and gold slipped more than 1 percent. "If gold continues to fall, which I suspect it might, then equities have more weakness in it," said Damien Boey, equity strategist at Credit Suisse. Shane Oliver, head of investment strategy at AMP Capital Investors, said: "Markets are gradually realizing that the long-term commodity boom, or super cycle some people call, that started around the turn of the century is now over." The benchmark S&P/ASX 200 index lost 80.2 points to 4,924.4, according to the latest data. The index rose 1.1 percent on Wednesday. The domestic market has been on the backfoot in recent sessions as soft data from the United States and Australia's biggest export market China soured sentiment. Taking a cue from the broad decline in miners, Australia's third-biggest iron ore miner Fortescue Metals Group tumbled 7.8 percent, despite reporting improved production in the March quarter. Australia's biggest-listed gold miner Newcrest Mining Ltd dived 7.1 percent to the lowest since October 2005. "We certainly think the resource sector has been oversold, relative to where commodity prices are," said Martin Lakos, a division director at Macquarie Bank, noting valuations of some miners look compelling at the moment. The energy sector also took a battering, with top oil and gas company Woodside Petroleum Ltd dropping 3.5 percent. The company's stock suffered its biggest one-day percentage loss in 11 months despite reporting a 55 percent rise in first-quarter production on Thursday, boosted by its flagship Pluto liquefied natural gas (LNG) project. Major banks turned lower or pared their gains in afternoon trade as the broad market extended its losses, with the No. 1 lender Commonwealth Bank of Australia ending 0.4 percent lower. Westpac Banking Corp closed up 0.1 percent. Australia's Wesfarmers Ltd rose 0.8 percent, after the mining-to-retail group said its Coles supermarkets posted improved quarterly sales results, driven by strong volume growth and competitive grocery prices. "There is ongoing demand for yield-bearing stocks perceived to be defensive in nature," Oliver said, noting that investors tend to flee cyclical stocks at times of uncertainty. Australia's biggest telecommunication company Telstra ended 0.6 percent lower, giving up gains made earlier. The company said it secured a A$1.1 billion ($1.1 billion), six-year contract with Australia's Defence Department, but rating agency Moody's said Telstra's credit profiles would come under pressure as it participate in Australia's spectrum auctions in April. New Zealand's benchmark NZX 50 index closed 0.8 percent lower at 4,442.1. (Reporting by Maggie Lu Yueyang; Editing by Shri Navaratnam) Link this Share this Digg this Email Reprints

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