Australian stocks: Market down on investor nervousness

MELBOURNE - The Australian share market closed lower on Wednesday over renewed investor nervousness about the health of the United States banking sector.

At the 1615 AEST close, the S&P/ASX200 had lost 23.3 points, or 0.6 per cent, at 3867.1 while the broader All Ordinaries was down 22.1 points, or 0.57 per cent, at 3840.1.

On the Sydney Futures Exchange, the June share price index futures contract had shed 28 points to 3856, on a volume of 22,536 contracts, according to preliminary calculations.

So-called "stress tests" by the US Federal Reserve on the 19 biggest banks in the US are set to be released on Thursday evening.

Some media reports have speculated that Bank of America Corp, which is one of the banks subjected to the stress tests, requires about US$34 billion in new capital.

IG Markets research analyst Ben Potter said local investors had decided to take profits soon after the media reports on Bank of America surfaced.

The drop in the market on Wednesday was nowhere near as bad as it might have been had the media reports been made six months ago.

"People are generally pretty risk-averse ahead of the official release of these results on Thursday night," Mr Potter said.

"There's a lack of buying today.

"The market seems to be quite happy to do nothing for the next 24 or 48 hours until they get the official reading on these stress tests."

In the resources sector, global miner BHP Billiton was off 58 cents at $33.90 and Rio Tinto reversed $1.87 at $69.11.

Iron ore miner Territory Resources firmed 0.5 cents to 21 cents as it said it would divest its 73 per cent holding in listed mineral sands miner Olympia Resources.

Oil and gas supplier Santos reversed 37 cents to $16.54 as it maintained its production guidance for 2009 and said it expected a jump in output from 2014.

Woodside Petroleum sagged 13 cents to $42.00.

Among the major banks, Westpac rose 46 cents to $19.96 after it said it was well placed to weather challenging market conditions despite reporting a 1.2 per cent fall in first half net profit.

National Australia Bank was up 12 cents at $21.87, ANZ was nine cents heavier at $16.64 and Commonwealth Bank sagged 20 cents to $36.02.

Elsewhere in the financial services sector, AXA Asia Pacific Holdings backtracked seven cents to $4.13 as it said it would pay down $430 million of senior debt after raising new capital.

On Wall Street overnight, the Dow Jones Industrial Average index fell 16.09 points, or 0.19 per cent, to 8,410.65.

In the gold sector, Lihir Gold scraped off one cent to $2.95 as it said it had its sights fixed on producing more than 1.5 million ounces of the precious metal annually in coming years.

Newmont was five cents poorer at $5.50 and Newcrest dumped $1.05 to $30.45.

The price of gold in Sydney at 1624 AEST was US$900.80 per fine ounce, down US$3.00 on yesterday's close of US$903.80.

Among the retailers, department store David Jones jettisoned four cents to $3.28 as it said it had noticed an improvement in consumer confidence during April and May but it was too early to call a turnaround.

Woolworths retreated nine cents to $26.16 and Wesfarmers, which owns Coles, surrendered $1.02 to $22.25.

In the media sector, News Corporation descended 46 cents to $13.29 and its non-voting stock gave away 47 cents to $12.00.

Consolidated Media nudged up one cent to $2.27 and Fairfax dipped two cents to $1.07.

Telco Telstra added five cents to $3.25 and Optus-owner Singapore Telecommunications found 11 cents at $2.44.

Among other stocks, Westfield Group fell 12 cents to $10.69 as chairman Frank Lowy said the shopping centre owner had seen the worst of property devaluations.

Construction materials supplier Boral was four cents richer at $4.51 after it sold its stake in cement maker Adelaide Brighton for $210 million.

Logistics services group Toll Holdings gained six cents to $6.36 as it said it would buy the remaining 49 per cent of Shenzhen-based ST-Anda Logistics that it did not already own.

The top-traded stock by volume was Adelaide Brighton, with 198.65 million shares worth $389.2 million changing hands.

Preliminary national turnover was 2.31 billion shares worth $3.76 billion, with 488 stocks down, 550 up and 302 unchanged.

- AAP