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MELBOURNE - A late recovery failed to stop the Australian share market from closing in the red following weakness among the big miners.
At the 1615 AEDT close, the benchmark S&P/ASX200 index was 51.2 points, or 1.5 per cent, lower at 3,351.2, while the broader All Ordinaries index fell 48.9 points, or 1.46 per cent, to 3,304.1.
On the Sydney Futures Exchange, the March share price index futures contract was off 38 points at 3,324 on a volume of 22,062 contracts, according to preliminary calculations.
"We were was down around 80 points at one stage but there was a Wall Street Journal report on Citigroup ... the market has rallied on that," ABN Amro Morgans private client adviser Trent Muller said.
The Wall Street Journal reported that the US government was in talks that could lead to it taking a stake of 25 to 40 per cent in troubled US bank Citigroup.
Mr Muller said Rio Tinto was lower on concerns that Rio's US$19.5 billion (A$30.32 billion) deal with China's state-backed aluminium group and major shareholder, Chinalco, to help pay down Rio's debt may not get approval from the Australian government.
Rio Tinto lost $3.42, or 6.8 per cent, to $46.87.
Elsewhere in the resources sector, global miner BHP Billiton, which was ex dividend, was down $1.20, or 3.93 per cent, to $29.31.
Fortescue Metals Group was in a trading halt amid expectations Chinese steel maker Hunan Valin Iron and Steel would take a stake in the iron ore miner as it raises up to $500 million in equity. Fortescue last traded at $2.83.
BlueScope Steel slumped 34 cents, or 10.9 per cent, to $2.78 after the steel maker slashed its interim dividend and warned of a second half loss.
Oil and gas producer Woodside Petroleum reversed 60 cents to $32.77 and Santos eased seven cents to $14.49.
Among the major banks, National Australia Bank was down 21 cents to $17.80, Commonwealth Bank nudged up one cent to $29.58, Westpac dipped six cents to $16.32, and ANZ improved one cent to $12.46.
On Wall Street on Friday, the Dow Jones Industrial Average index fell 100.28 points to 7,365.67 - a new six-year as investors around the world kept selling on pessimism about the global economy.
In the media sector, Fairfax Media fell 3.5 cents to $1.015 after it reported a first half net loss of $365 million and said it was battening down the hatches to ride out the economic downturn.
News Corp was 12 cents higher at $10.32, while its non-voting stock added four cents to $9.25.
Consolidated Media retreated six cents to $1.83.
Among gold stocks, Newcrest descended 34 cents to $32.69, Newmont strengthened 36 cents to $6.76 and Lihir gained three cents to $3.43.
The price of gold in Sydney at 1630 AEDT was US$987.90 per fine ounce, up US$14.70 on Friday's close of US$973.20 per fine ounce.
Telco Telstra was four cents richer at $3.75, and Optus-owner Singapore Telecommunications lifted two cents to $2.51.
Retailer Woolworths advanced 31 cents to $27.93 and Wesfarmers, which owns Coles, was up 10 cents at $17.89.
Among other stocks, airline Virgin Blue Holdings put on 0.5 cents to 24 cents despite reporting a first half loss.
Casino operator Crown was eight cents lower at $4.75 as it said it remained committed to its gaming licence application in Pennsylvania in the United States.
Rural services and automotive components supplier Futuris Corporation shed 2.5 cents to 26 cents as it sold a further 14.99 per cent stake in beef producer Australian Agricultural Company Ltd (AACo). AAco was in a trading halt, having last traded at $1.65.
Project manager Transfield Services gave away 14.5 cents to $1.69 as it said it was on track to achieve full year profit growth of more than 10 per cent despite a sharp fall first half profit.
Macquarie Airports dumped 12.5 cents, or 7.02 per cent, to $1.655 at as it announced its distribution guidance for fiscal 2009, after it cancelled a buyback and joined other Sydney Airport stakeholders in a plan to pay down the operator's debt.
The top-traded stock by volume was property firm GPT Group, with 109.96 million shares worth $57.7 million changing hands.
GPT was steady at 52.5 cents.
Preliminary national turnover was 1.23 billion shares worth $3.2 billion, with 579 stocks down, 323 up and 288 unchanged.
- AAP
