Australian stocks: Market suffers slight drop

MELBOURNE - Weaker commodity prices and resource stocks pulled the Australian share market down almost one per cent, offsetting gains among financial stocks.

At 1615 AEST, the benchmark S&P/ASX200 was down 36.3 points, or 0.91 per cent, at 3,934.9, while the broader All Ordinaries eased 35.4 points, or 0.89 per cent, to 3933.6.

On the Sydney Futures Exchange, the June share price index contract was 14 points lower at 3,944 on a volume of 29,202 contracts.

Overnight falls in commodity prices combined with a big sell down in BHP Billiton and Rio Tinto weighed heavily on the market, Ord Minnett private client adviser Jon Hancock said.

"There's been a shuffling of (fund managers') portfolios to take up the rights issue with Rio," he said.

Last week, Rio Tinto announced a $18.96 billion rights issue and signalled the end to its $24.4 billion deal with China's Chinalco.

Rio Tinto shares on Tuesday fell $1.88, or 2.59 per cent, to $70.61 and BHP Billiton's shares dropped $1.68, or 4.4 per cent, to $36.50.

"Banks have held up fairly well considering the deterioration in BHP and Rio prices," Mr Hancock said.

Commonwealth Bank led the banking sector higher, putting on 48 cents, or 1.31 per cent, to $36.99, ANZ Banking Group added 11 cents, or 0.67 per cent, to $16.41, Westpac Banking Corporation firmed 12 cents, or 0.62 per cent, to $19.35.

National Australia Bank fell 25 cents, or 1.14 per cent, to $21.70.

By 1625 AEST, diversified resources stocks were mostly weaker with oil majors mixed.

Santos gained six cents to $15.06, while Oil Search lost six cents to $5.62.

Major gold stocks fell more than three per cent, with dual-listed Newmont Mining the worst off, down 25 cents, or 4.17 per cent, at $5.74.

Lihir Gold lost 12 cents, or 3.83 per cent, to $3.01 and Newcrest Mining gave up $1.09 or 3.33 per cent, to $31.65.

By 1629 AEST, the spot price of gold in Sydney was trading at US$952.10 per fine ounce, down US$29.05 on Friday's close of US$981.15.

In news today, shares in blood products and vaccines developer CSL Ltd climbed $1.51, or 5.21 per cent, to $30.49 after the company said it would hand back money to shareholders after terminating a planned US$3.1 billion(A$3.87 billion) takeover of US-based Talecris Biotherapeutics Inc.

Retailers were mixed, with grocery giant Woolworths down 11 cents at $26.19, upmarket store owner David Jones steady at $3.90 and JB Hi-Fi surging 69 cents, or 5.12 per cent, to $14.17.

The discount electronics retailer indicated it is defying the economic downturn after it announced it will beat its full year 2009 profit guidance by $5 million and post a full year 2009 net profit of $92 million, up 41 per cent on the previous year.

By 1638 AEST media stocks were mostly weaker, with Fairfax Media easing two cents to $1.24, Consolidated Media down five cents to $2.32 and News Corporation gaining 10 cents to $14.60.

News' non-voting scrip was up 34 cents down at $13.00.

Building materials, sugar and alumina company CSR Ltd fell 15 cents, or 8.9 per cent, to $1.535 after protesters demonstrating over climate change targeted a large aluminium smelter in NSW, Mr Hancock said.

The top traded stock by volume was property group Mirvac, with 160.98 million shares changing hands for $194.57 million. Its share price was down 2.2 cents, or 1.83 per cent, at $1.19.

Preliminary market turnover reached 2.36 billion shares worth $5.86 billion, with 477 stocks up, 610 down and 336 steady.

- AAP