Reuters: Hot Stocks: Australian shares fall on weak Chinese PMI, miners falter

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Australian shares fall on weak Chinese PMI, miners falter May 2nd 2013, 06:38 Thu May 2, 2013 2:38am EDT (Adds details, comments) SYDNEY May 2 (Reuters) - Australian shares fell 0.7 percent on Thursday, dragged down by miners in a large commodity selloff on news of shrinking industrial activity in China, Australia's largest export market. China's factory-sector growth eased in April as new export orders fell for the first time this year, suggesting the euro zone recession and sluggish U.S. demand may be risks to China's economic recovery. "It seems that data globally is dangerously close to contraction in many of the manufacturing surveys, while the services prints aren't too flash either," said Chris Weston, chief market strategist at IG. The final HSBC Purchasing Managers' Index (PMI) dropped to 50.4 in April from March's 51.6 and was largely in line with a flash reading last week of 50.5. Heavyweight mining stocks BHP Billiton Ltd dropped 1.2 percent while rival Rio Tinto lost 2 percent. Copper fell sharply on Thursday, tracking losses overseas on worries the global economy may be entering a soft patch for growth and gold held near its weakest level in almost a week, pressured by a drop in holdings on exchange-traded funds, equities and other commodities. The S&P/ASX 200 index fell 36.2 points to finish at 5,130. The benchmark fell 0.5 percent on Wednesday. "In the Australian market, again it was the cyclical sectors that naturally reacted to the raft of negative data," Weston said. A recent string of disappointing data from the United States, Europe and China have raised concerns about the global economic recovery and dulled investor enthusiasm for riskier stocks and commodities. Financials also undermined the market, with Westpac Banking Corp and top lender Commonwealth Bank of Australia losing 0.5 percent and 0.6 percent respectively. Australia New Zealand Banking Group also lost 0.6 percent. Westpac, Commonwealth Bank and ANZ Bank all reached record highs earlier in the week on the back of a strong earnings report from ANZ. "They've had a very good run in recent times," said Steven Daghlian, market analyst at Commonwealth Securities. "[The big four banks are] up on average about 25 percent for this year, I think it's just things balancing out." Meanwhile, Myer Holdings Ltd plumbed 2.3 percent after CEO Bernie Brookes lashed out at the Federal Government over the National Disability Insurance Scheme, saying the levy would stop customers from spending at his store. Rival David Jones shed 2.8 percent. Some strength in the defensives sector helped to cap broader losses. Telecommunications giant Telstra Ltd added 0.6 percent to hit a fresh 8-year high of A$5.06. Flight Centre Ltd added 0.1 percent to notch a record closing high of A$38.20 after the travel agent raised its full year underlying profit before tax to $325-$340 million. U.S. stocks fell sharply on Wednesday as the latest economic data continued a trend of indicators pointing to anaemic growth while bellwether companies disappointed on revenue. New Zealand's benchmark NZX 50 index fell 0.6 percent or 28.6 points to 4,574.5. (Reporting by Thuy Ong, additional reporting by Michael Sin; Editing by Eric Meijer) Link this Share this Digg this Email Reprints

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