Australian stocks: Market follows US lead down

MELBOURNE - The Australian share market closed lower on Monday, after a negative lead from United States markets on Friday and uncertainty around funding for struggling car makers in the United States.

At the 1615 AEDT close, the benchmark S&P/ASX200 had dropped 67.9 points, or 1.85 per cent, to 3,604.4, while the broader All Ordinaries lost 61.4 points, or 1.7 per cent, to 3,554.2.

On the Sydney Futures Exchange, the June share price index futures contract was off 63 points at 3,614, on volume of 16,746 contracts, according to preliminary calculations.

City Index markets strategist Alex Douglas said the waekness in the Australian market followed softness in the US futures market and Asian markets during the day.

"That's seen us soften a fair bit," Mr Douglas said.

He said speculation that the administration of US president Barack Obama may not provide more government aid money in the longer term to struggling US carmakers General Motors and Chrysler was creating uncertainty on share markets.

"Markets hate uncertainty," Mr Douglas said.

On the local market, lower oil prices helped drag oil stocks lower, but miner Rio Tinto lifted on rumours that bigger rival BHP Billiton had renewed interest in Rio as a takeover target, Mr Douglas said.

In the resources sector, global miner BHP Billiton fell $1.46 to $32.55, and Rio gained 32 cents to $57.20.

Debt-laden miner OZ Minerals was in a trading halt as Chinese state-owned Minmetals Non-ferrous Metals Company remained in talks with Australian regulators about a revised takeover offer for the company. OZ Minerals last traded at 55.5 cents.

Lead and zinc explorer Terramin Australia soared 18.5 cents, or 40.66 per cent, to 64 cents as it formed separate strategic partnerships with a Chinese state-owned company and a commodities trading house that will deliver it $46 million to help finance its Tala Hamza development in Algeria.

Oil and gas producer Woodside Petroleum descended $1.79 to $39.21, and Santos surrendered 73 cents to $16.74.

Among the other major banks, National Australia Bank lost 30 cents to $20.79, ANZ dumped 70 cents to $15.85 and Westpac lifted six cents to $19.20.

Commonwealth bank backtracked 30 cents to $34.70 as its said its wholly owned bank subsidiary Bankwest would cut 400 jobs from its workforce due to the economic downturn.

On Wall Street on Friday, the Dow Jones Industrial Average index fell 148.38 points, or 1.9 per cent, to 7,776.18.

In the gold sector, Newmont was 14 cents higher at $6.74, Newcrest fell $1.23 to $32.31 and Lihir was steady at $3.23.

The price of gold in Sydney at 1626 AEDT was US$924.30 per fine ounce, down US$10.60 on Friday's close of US$934.90.

Telco Telstra eased two cents to $3.23 and Optus-owner Singapore Telecommunications firmed three cents to $2.49.

Retailer Woolworths gave away 22 cents at $25.28 and Wesfarmers, which owns Optus, fell 35 cents to $18.44.

In the media sector, News Corp was down 15 cents to $11.44 and its non-voting stocks shed six cents to $10.01.

Consolidated Media stepped back 14 cents to $1.98 and Fairfax sagged two cents to $1.005.

Among other stocks, independent market operator NSX Ltd was steady at 15.5 cents as it received a requisition notice demanding that it convene a meeting of shareholders to consider removing six directors from its board.

The top-traded stock by volume was Macquarie Office Trust, with 59.6 million shares worth $9.97 millon changing hands. Macquarie Office Fund was dowm 2.5 cents at 16.5 cents.

Preliminary national turnover was 1.33 billion shares worth $2.7 billion, with 482 stocks down, 420 up and 281 unchanged.

- AAP