Australia stocks: Market down on light trading

PERTH - The Australian share market closed in the red on very light trading volumes ahead of Tuesday night's federal budget, weighed down by losses in most major sectors.

The S&P/ASX200 index was down 48.8 points, or 1.24 per cent, at 3,877.2 while the broader All Ordinaries index had shed 46.9 points, or 1.2 per cent, to 3,863.6.

On the Sydney Futures Exchange at 1618 AEST, the June share price index futures contract had dipped 57 points to 3,874 on a volume of 25,864 contracts.

IG Markets research analyst Ben Potter said trading volumes had been "extremely light" as the market took a breather after a recent "huge run up".

"The pullback so far has been on very low volumes, indicating that the market is falling predominantly due to a lack of buying rather than an overwhelming amount of selling," Mr Potter said.

He said Macquarie Airports, Transurban, Toll Holdings, Brambles and Macquarie Infrastructure Group were the worst performers within the industrials sector.

Macquarie Airports was down eight cents at $1.91, Transurban shed 18 cents to $3.92, Toll eased 20 cents o $6.70, Brambles fell 18 cents to $5.92 and Macquarie Infrastructure was two cents at $1.38.

Mr Potter said BHP Billiton's fall weighed heavily on the market, retreating 97 cents, or 2.75 per cent, to $34.31.

Rival mining giant Rio Tinto fell 80 cents, or 1.15 per cent, to $68.48.

The "big four" banks were weaker. Westpac was down seven cents at $20.38, National Australia Bank had sunk 74 cents at $21.86, Commonwealth Bank had dipped eight cents to $36.60 and ANZ had given up 25 cents to $15.97.

Making headlines on Tuesday, agribusiness AWB Ltd has downgraded its profit guidance for the first half of fiscal 2009 due to the poor performance of its operations in Brazil.

AWB was down nine cents, or 6.98 per cent, at $1.20.

Poker machine designer and supplier Ainsworth Gaming Technology says it expects a trading loss in the second half of 2008/09 due to soft market conditions and currency fluctuations.

Its shares were steady at eight cents.

Debt-laden steel maker OneSteel says it has strengthened its balance sheet after raising $205 million from the retail component of its accelerated non-renounceable entitlement offer.

OneSteel shares were three cents lower at $2.51.

Among energy stocks, Oil Search added two cents to $5.24 and Woodside Petroleum backtracked 90 cents, or 1.97 per cent, to $44.74.

Santos is in a trading halt after announcing plans to raise up to $3 billion on Monday to underpin its commitments to two major liquefied natural gas projects. It last traded at $17.09.

The spot price of gold in Sydney was US$913.05 per fine ounce, down US$1.95 from Monday's local close of US$915.00.

Gold mining stocks were mixed. Lihir Gold was up four cents at $3.06, Newcrest put on 20 cents to $29.70 and Newmont had inched two cents lower to $5.59.

Among retail stocks, Coles owner Wesfarmers was 17 cents stronger at $22.81 and Woolworths had advanced 20 cents to $25.75.

Iron ore miner Admiralty Resources was the top traded stock by volume, with 326.2 million shares changing hands worth $9.92 million.

Admiralty announced on Tuesday that it had settled a long-running dispute with Wyndham Explorations, bringing to an end all current legal suits and actions in Chile and Australia between the two parties.

As a result, Admiralty will purchase from Wyndham the 40 per cent of Vallenar Iron Company that it does not already own.

Admiralty shares were up 0.9 of a cent, or 36 per cent, at 3.4 cents.

Preliminary national turnover reached 2.56 billion shares, worth $4.33 billion, with 391 stocks up, 624 down and 292 unchanged.

- AAP