Australian stocks: Market down five points

PERTH - The Australian sharemarket closed marginally weaker, with gains in the materials sector partially offsetting losses among financial stocks.

The benchmark S&P/ASX200 was down 5.4 points, or 0.14 per cent, to 3,747.5, while the broader All Ordinaries shed four points, or 0.11 per cent, to 3,693.9.

On the Sydney Futures Exchange at 1616 AEST, the June share price index contract was 18 points lower at 3,746 on a volume of 18,169 contracts.

IG Markets head of dealing Martin Batur said all big four banks were in the red, with National Australia Bank (NAB) faring the worst.

NAB fell 69 cents, or 3.07 per cent, to $21.78, Commonwealth Bank dropped 30 cents to $36.26, ANZ was 33 cents weaker at $16.99 and Westpac slipped four cents to $20.71.

Mr Batur said BHP Billiton and explosives maker Orica were among the best performing materials stocks.

Orica put on 30 cents, or 1.83 per cent, to $16.70, while BHP Billiton added 50 cents, or 1.51 per cent, to $33.54.

Rio Tinto's March quarter production report revealed weakness in its iron ore and aluminium divisions, but good gains in copper and hard coking coal.

The mining giant earlier on Wednesday announced it was to raise US$3.5 billion (A$4.8 billion) by issuing two medium-term bonds to help erode its heavy debt burden.

"Certainly going through the debt markets is expensive, however, does not have the dilutive effect equity raisings achieve and anything they can do to reduce debt whilst appeasing shareholders is paramount for Rio at present," Mr Batur said.

"Investors will be looking at tonight's annual general meeting in London where we expect the management to come under heavy questioning from their big institutional investors."

Shares in Rio Tinto were up 61 cents, or 1.08 per cent, to $57.35.

Rio Tinto's uranium mining subsidiary Energy Resources of Australia (ERA) said its first quarter output fell nine per cent because of lower grades of ore extracted.

ERA slumped $1.56, or 6.84 per cent, to $21.25.

Coal & Allied Industries, which is also majority owned by Rio Tinto, said its share of saleable coal production was down nine per cent in the March quarter due to wet weather.

Shares in Coal & Allied were five cents stronger at $73.10.

Energy shares were weaker. Santos slipped 10 cents to $16.78, Woodside retreated 44 cents to $38.88 and Oil Search inched four cents lower to $5.32.

Gold stocks were mixed. Newmont put on eight cents to $5.93, Newcrest appreciated 52 cents to $30.55 and Lihir Gold inched one cent lower to $2.99.

The spot price of gold in Sydney was US$891.40 per fine ounce at 1621 AEST, down US$5.80 from Tuesday's local close of US$897.20 an ounce.

Making headlines on Wednesday, buyers have been found for almost all of the sub group of 241 ABC Learning childcare centres that were originally believed to be unviable.

Shares in Qantas were down five cents, or 2.5 per cent, at $1.95.

Qantas chief executive Alan Joyce said safety at the airline would not be jeopardised by plans to slash 1,750 management jobs.

Retail stocks were mixed. Woolworths advanced 31 cents to $25.49, Coles owner Wesfarmers added 32 cents to $19.89 and up-market department store chain David Jones was two cents lower at $3.08.

Harvey Norman shares were steady at $2.83 after the whitegoods and furniture retailer said sales for the nine months to March 31 were up 3.6 per cent to $4.54 billion.

Among media stocks, Fairfax inched one cent lower to $1.10, News Corp shares were two cents weaker at $11.73 and its non-voting scrip was down 17 cents at $10.33.

Junior mineral explorer Jervois Mining was the most traded stock by volume with 43.74 million shares changing hands worth $354,234.

Its shares were up 0.2 cents, or 33.33 per cent, at 0.8 cents.

Preliminary national turnover was 1.53 billion shares worth $3.32 billion, with 499 stocks up, 415 down and 328 unchanged.

- AAP