Reuters: Hot Stocks: Australian shares dive to one-month low, Japan uncertainty hits

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Australian shares dive to one-month low, Japan uncertainty hits May 24th 2013, 06:47 Fri May 24, 2013 2:47am EDT (Adds details, comments) SYDNEY May 24 (Reuters) - Australian shares reversed early gains to fall 1.6 percent as faltering banks and market volatility hit investor sentiment on Friday, sending the benchmark index tumbling further from one-month lows touched a day earlier. Japan's Nikkei share average turned positive in a volatile session on Friday afternoon after the previous session's 7.3 percent plunge. "People are still very nervous about what's happening in Japan, and the extreme volatility we're seeing over there," said Damien Boey, equity strategist at Credit Suisse. "It doesn't look like the situation is under control and this is a problem from the perspective of growth because obviously Japan and Asia are major trading partners." The S&P/ASX 200 index fell 79 points to finish at 4,983.5, its lowest close since April 23, according to the latest data. The index is down 3.8 percent for the week - the biggest weekly drop in a year. Financials dragged as Westpac Banking Corp dropped 2 percent and top lender Commonwealth Bank of Australia lost 1.4 percent. Australia's fourth-largest bank, Australia and New Zealand Banking Group Ltd, tumbled 1.6 percent. "In terms of why banks are selling, people are looking at anything that was connected to the yield bubble and they're thinking 'it's expensive, we're just going to sell it'," Boey noted. Compared to the region, the S&P/ASX 200 index suffered heavy losses. MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.4 percent. Australian casino company Crown Ltd sold its 10 percent stake in rival Echo Entertainment Group, signalling billionaire owner James Packer is confident of winning approval for a new high-roller casino in Sydney. Crown fell 1.8 percent while rival Echo plummeted 11.9 percent to all-time lows of A$3.03. Global iron ore miners finished the session lower after a weak Chinese manufacturing activity survey, adding to fears that recovery in the top metals-consuming nation has stalled. BHP Billiton Ltd and Rio Tinto Ltd dived 1.5 percent and 1.1 percent respectively. Defensives were also weaker: Top telecommunications provider Telstra Ltd tumbled 1.6 percent while insurer QBE Insurance Ltd lost 3.6 percent. Consumer staples retailers Woolworths Ltd and Wesfarmers Ltd declined 1.5 percent and 2.3 percent respectively. Service Stream Ltd stumbled 9.1 percent to A$0.15 after the specialist telecoms construction company announced that the drop in earnings from the loss of its contract to build the National Broadband Network's infrastructure for Australia's vast Northern Territory had breached its bank covenants. Gold miners lent support to the market, helping to mitigate broader losses after investors sought a safe haven as the dollar and equity markets were hit by weak manufacturing data that indicated stagnant global growth. Newcrest Mining Ltd and Regis Resources Ltd soared 3.9 percent and 6.1 percent respectively. Underground gold miner Kingsrose Mining Ltd surged 6.4 percent. The flash HSBC Purchasing Managers' Index (PMI) for China fell to 49.6 for May, slipping under the 50-point level demarcating expansion from contraction for the first time since October. New Zealand's benchmark NZX 50 index lost 1.4 percent or 62.3 points to touch a one month low of 4,526.2,. (Reporting by Thuy Ong; Editing by Eric Meijer) Link this Share this Digg this Email Reprints

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