Aussie stocks: US decline sets tone

Australian shares have closed more than 1.5 per cent lower as banks ended their recent price surge and big miners declined following weaker metal prices.

At the 1610 AEST close on Monday, the benchmark S&P/ASX200 was down 72.6 points, or 1.63 per cent, at 4388.4, while the broader All Ordinaries dropped 67 points, or 1.5 per cent, to 4398.1.

On the Sydney Futures Exchange, the September share price index contract was 69 points lower at 4356 on 28,284 contracts.

ABN Amro Morgans private client adviser Craig Walker said the decline in US stocks on Friday set the tone for the day.

"The banks have given up their substantial gains, especially Commonwealth Bank, which went ex-dividend today," Mr Walker said.

"Commodity prices were down significantly on Friday, so (BHP Billiton and Rio Tinto's declines were) just a reaction to that."

Commonwealth Bank fell $1.72, or 3.66 per cent, to $45.30, ANZ declined 49 cents, or 2.36 per cent, to $20.25, National Australia Bank eased 67 cents, or 2.41 per cent, to $27.08, and Westpac gave up 52 cents, or 2.13 per cent, to $23.88.

BHP Billiton fell $1.13 cents to $37.13, while rival Rio Tinto lost $2.89 to $57.10, after the price of copper, a benchmark industrial metal, for September delivery fell 2.7 per cent to US$2.836 a pound.

Iron ore miner Fortescue Metals added 13 cents to $4.58, after saying it had agreed to sell 20 million tonnes of iron ore to Chinese customers at a 35 to 50 per cent discount to 2008/09 prices for the remainder of this calendar year.

In the US, the broad-market Dow Jones Industrial average shed 76.79 points, or 0.82 per cent, to 9321.4.

Mr Walker said the reporting season was the other factor influencing the mood of investors.

Companies to report earnings on Monday included Ansell, NIB Holdings, Newcrest Mining, iiNet and Bluescope Steel.

Ansell added four cents to $9.44 after the rubber gloves and condoms maker reported a 1.6 per cent fall in annual profit and said this year was likely to be "challenging" as subdued consumer spending continued to affect sales.

NIB jumped 11 cents to $1.05 after the health insurer said underwriting profit in 2009/10 may rise as much as 24 per cent.

iiNet gained 15 cents to $2.15 after the internet service provider posted a jump in full year profit after it increased subscriber numbers despite the economic downturn.

BlueScope slumped 23 cents, or 6.97 per cent, to $3.07 as the steel maker blamed a "global liquidation sale" of steel for its full year loss.

"Bluescope's result was slghtly dissapointing and its outlook commentary was a little conservative," Mr Walker said.

Newcrest rose 50 cents to $29.65 after the gold miner lifted its annual profit by 84.7 per cent on the higher price of gold and lower operating costs.

The share price of other gold miners declined as the precious metal's price slipped. Lihir fell four cents to $2.56 and Sino Gold losing five cents to $5.69.

At 1630 AEST, the spot price of gold in Sydney was US$941.70 per fine ounce, down US$15.25 on Friday's close of US$956.95.

Austin Engineering gained nine cents, or 4.15 per cent, to $2.26 after the company lifted its annual net profit by 29 per cent and said economic conditions would stabilise this financial year.

Transfield Services Infrastructure Fund added five cents, or 5.26 per cent, to $1.00, after saying future earnings were underpinned by a strong portfolio of projects, despite reporting an annual net loss of $38.02 million.

The MAC Services Group fell 5.5 cents, or 3.4 per cent, after the mining services firm said it was continuing to eye acquisition opportunities after posting a 29.7 per cent jump in full year profit.

Mining services companies Ausdrill and Brandrill will merge under a scrip deal that values Brandrill at $45.2 million and gives Ausdrill an entry into the coal market.

Ausdrill slumped nine cents, or 6.52 per cent, to $1.29 while Brandrill surged 24 per cent, or 1.6 cents, to 8.2 cents.

Infigen Energy jumped 10 cents, or 8.16 per cent, to $1.325 as the firm, formerly known as Babcock & Brown Wind Partners, appointed advisors to begin a sale process for all or part of its US business.

V Australia is ramping up its international operations by launching direct flights to Phuket and Johannesburg. Shares in Virgin Blue lost one cent to 37 cents.

Bounty Oil & Gas was the most traded stock by volume, with 151.7 million shares changing hands for $9.65 million. Its shares gained 3.1 cents, or 67 per cent, to 7.7 cents.

Market turnover was 2.6 billion shares worth $5.01 billion, with 488 stocks up, 655 down and 306 steady.

- AAP