Australian stocks fall after airline worries

The Australian share market closed lower on Monday taking its lead from United States markets, which fell after Wall Street's most powerful firm, Goldman Sachs & Co, was accused by the US government of misleading investors.

Investors also took profits amid concerns surrounding the Europe-wide flight ban arising from the ash cloud spreading from Iceland's Eyjafjoell volcano.

At the 1615 AEST close, the benchmark S&P/ASX200 index had fallen 69.6 points, or 1.4 per cent, to 4,915.1 points while the broader All Ordinaries index dropped 67.9 points, or 1.36 per cent, to 4,939.4 points.

On the Sydney Futures Exchange, the June share price index futures contract was 75 points lower at 4,923 points, on volume of 24,262 contracts, according to preliminary calculations.

City Index market strategist Michael McCarthy said the Australian market had performed weakly on Monday.

"The key driver here was the news out of New York on Friday that the SEC (US Securities and Exchange Commission) will be bringing civil charges against Goldman Sachs.

"Perhaps we are seeing some concerns around the European volcanic haze."

Mr McCarthy said the sell-off of local financial stocks and airlines appeared to be based more on sentiment and the moderation of investors' recent strong appetite for risk.

"It just goes to show how vulnerable markets remain to panic selling," he said.

In the resources sector, global miner BHP Billiton was 70 cents poorer at $42.84, and Rio Tinto dumped $1.71 to $77.96.

Macarthur Coal was steady at $16.54 after its largest shareholder said it still did not have enough information to decide whether to back a takeover bid for the collier by US coal giant Peabody Energy.

Kimberley Metals firmed 1.5 cents to 26 cents after China's largest lead producer agreed to buy a 15 per cent stake in Kimberley Metals.

Oil and gas producer Woodside Petroleum shed 75 cents to $45.97 and Santos reversed 33 cents to $14.09.

Among the major banks, ANZ was off 61 cents at $25.08 after completing the acquisition of The Royal Bank of Scotland's Taiwan businesses.

National Australia Bank backtracked 29 cents to $28.08, Commonwealth Bank retreated 73 cents to $59.10 and Westpac surrendered 42 cents to $27.76.

National carrier Qantas Airways descended six cents to $2.92 and budget airline operator Virgin Blue lost three cents to 62.5 cents.

In the media sector, Seven Network was four cents lower at $7.74 after its merger with Kerry Stokes' privately owned Caterpillar products dealer WesTrac was likely to get the nod from the broadcaster's shareholders at a meeting in Sydney.

News Corp was 27 cents higher at $19.58 and its non-voting stock was up 22 cents at $16.97.

Consolidated Media dipped two cents to $3.10 and Fairfax sagged 1.5 cents to $1.745.

Telco Telstra scraped off one cent at $3.12 and Optus-owner Singapore Telecommunications nudged up one cent to $2.43.

Retailer Woolworths worsened six cents to $27.22 and Wesfarmers, which owns Coles, eased 53 cents to $31.86.

In the gold sector, Lihir was off two cents at $3.96 and Newcrest was 61 cents weaker at $34.00.

The price of gold in Sydney at 1629 AEST was US$1132.40 per fine ounce, down US$19.84 on Friday's closing price of US$1152.24.

Among other stocks, beef producer Australian Agricultural Company Ltd (AAco) was 1.5 cents lower at $1.415 after it said it would become a bigger exporter of live cattle as part of moves to return the company to profitability.

The top-traded stock by volume was Samson Oil & Gas, with 237.8 million shares worth $9.72 million changing hands. Samson Oil &nd Gas was 0.9 cents higher at 4.3 cents.

Preliminary national turnover was 2.43 billion shares worth $4.73 billion, with 814 stocks down, 320 up and 334 unchanged.

- AAP