Australian stocks: Market closes lower

SYDNEY - The Australian share market finished lower following a weak lead from overseas compounded by lower commodity prices and more capital raisings.

At 1615 AEST, the S&P/ASX200 index was down 37.6 points, or one per cent, at 3735.6, while the broader All Ordinaries index had lost 37.3 points, or 0.99 per cent, to 3721.6.

On the Sydney Futures Exchange, the June share price index futures contract was 40 points lower at 3739, on a volume of 16,732 contracts.

The market opened lower on falls in overseas equities, metals and oil prices.

Capital raising announcements from surfwear retailer Billabong International and grains marketer GrainCorp prevented an improvement.

"It feels like we are really swimming against the current at the moment with all the capital raisings taking place, including Grain Corp and Billabong today," IG Markets institutional dealer Chris Weston said.

"Whilst these are taking place the index will find it hard to go higher and certainly quite a bit of sideline cash is being used to fund the additional share purchases."

The major miners closed lower.

Rio Tinto lost 73 cents, or 1.18 per cent, to $61.15 and BHP Billiton dropped 44 cents, or 1.32 per cent, to $32.90.

The financials sector was also weaker as investors sold down after Westpac went ex-dividend.

Westpac lost 93 cents, or 4.55 per cent, to $19.52. Its final dividend was 56 cents a share, fully franked.

National Australia Bank was steady at $21.47, Commonwealth Bank dropped 32 cents to $35.50, and ANZ Banking Group gained three cents to $15.30.

The gold sector was mixed despite a surge on the gold price, which analysts said would continue to advance amid wider sharemarket uncertainty.

At 1622 AEST, the spot price of gold in Sydney was US$931.55 per fine ounce, up US$5.70 from Friday's local close of US$925.85.

Newmont lost seven cents to $5.56, Lihir Gold added four cents to $3.02 and Newcrest Mining gained 30 cents to $29.81.

Oil stocks were mostly lower after further falls in crude oil prices.

Santos added seven cents to $14.20, Oil Search lost seven cents to $5.03 and Woodside Petroleum shed 68 cents to $42.81.

Billabong announced it plans to raise raise as much as $290 million in a capital raising, the majority of which will be used to pay down debt.

The surfwear retailer also cut its profit forecast because its US operations had been hit by weaker consumer spending.

Billabong shares were in a trading halt at $10.62.

Grains marketer Graincorp said it was seeking $60 million from institutional investors, after confirming full year net profit guidance of between $37 million and $42 million, given improved seasonal conditions.

Graincorp shares were in a trading halt at $7.40.

In other news, OZ Minerals says the National Development and Reform Commission of the People's Republic of China (NDRC) has given its approval Minmetals' proposed acquisition of various assets and businesses from OZ Minerals.

Oz Minerals shares gained four cents, or 5.56 per cent, to 76 cents.

Telstra gained two cents to $3.20, while Optus' parent Singapore Telecommunications added 13 cents to $2.67.

The top traded stock by volume was Babcock & Brown Infrastructure, with 53.09 million shares changing hands for $4.32 million.

Its shares were down 1.2 cents, or 13.19 per cent, at 7.9 cents.

Preliminary turnover was 1.57 billion shares worth $3 billion, with 346 stocks up, 625 down and 308 steady.

- AAP