Reuters: Hot Stocks: Australia shares, reversing early gains, fall on China fears

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Australia shares, reversing early gains, fall on China fears Jun 25th 2013, 06:31 Tue Jun 25, 2013 2:31am EDT (Adds analysis, quotes) SYDNEY, June 25 (Reuters) - Australian shares reversed early gains to fall 0.3 percent on Tuesday as investors fretted that a cash crunch could slow Chinese growth, but a weaker Australian dollar buoyed exporters, helping to cap losses. Flagship miners BHP Billiton Ltd and Rio Tinto Ltd lost 1.7 percent and 2.5 percent respectively, thanks to fears that tighter liquidity and slower growth in China could reduce its demand for iron ore. The People's Bank of China said banks needed to do a better job of managing their cash and lending as the central bank attempts to move the world's second largest economy away from credit-driven investment. The S&P/ASX 200 index, which dropped 1.5 percent on Monday, finished the day 13.1 points lower at 4,656. It is up oly 0.2 percent in 2013. IG's chief market strategist Chris Weston said lack clarity about China and U.S. monetary policy "should keep investors away for now." Stocks have been hit hard in recent sessions by concerns about the U.S. Federal Reserve's plan to cut back on the money it pumps into the world's largest economy, causing sharp adjustments in global asset markets. Less than a week after the latest Fed comments, two of its top officials downplayed the notion of an imminent end to monetary stimulus and said on Monday the market reaction was not yet cause for concern. "I still think we've still got a little bit of a hangover of the commentary from the U.S. Fed Reserve," said Martin Lakos, division director at Macquarie Bank. "There's absolutely no doubt markets are very oversold, so it wouldn't surprise to see the market bounce back over the next week or so." Companies benefiting from the sliding Aussie dollar on Tuesday included biotechnology firm CSL Ltd, which climbed 2.1 percent. Building products maker James Hardie Industries Ltd edged up 0.2 percent. The Australian dollar held at $0.9264, after bouncing off a 33-month low of $0.9148 but not making much headway. Financials also helped mitigate losses. The Commonwealth Bank of Australia rose 0.6 percent and Westpac Banking Corp added 0.5 percent. Billabong International Ltd surged 46 percent to A$0.19 after the surfwear company said its refinancing and asset sale discussions were "well advanced". Asciano Ltd rose 3 percent to A$4.84 after reaffirming its full year 2013 growth guidance. Australia's Newcrest Mining Ltd slid 2.4 percent to A$9.30. The world's third biggest gold producer has decided on an independent review after concerns were raised that it supplied market sensitive information to a small number of securities analysts earlier this month. New Zealand's benchmark NZX 50 index lost 1.1 percent or 47.1 points to finish at 4,317. (Reporting by Thuy Ong; Editing by Richard Borsuk) Link this Share this Digg this Email Reprints

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