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MELBOURNE - Australian stocks have backtracked into negative territory following a weak Wall Street lead and falling Australian dollar.
At 1615 AEDT, the benchmark S&P/ASX200 was down 146.4 points, or 3.4 per cent, at 4156.1, while the broader All Ordinaries lost 131.4 points, or 3.09 per cent, to 4120.
On the Sydney Futures Exchange, the December share price index futures contract was 174 points lower at 4,163 on a volume of 24,871 contracts.
Man Financial broker Anthony Anderson said today's session was lacklustre on low volumes.
"It's been pretty ho-hum. There's not a lot of strength in it. The Aussie dollar was weaker overnight and the market likes to see strength in the dollar - it's almost a confidence thing," he said.
"People are pretty much sidelined."
The only bright spots to push into positive territory amid a sea of red were National Australia Bank and Rio Tinto Ltd.
After posting 2009 cash earnings of $3.916 billion yesterday, investors pushed shares in National Australia Bank 99 cents, or 4.01 per cent, higher to $25.65.
"NAB is a bit of a relief rally I believe," Mr Anderson said.
He said the result was "average" but not the death knell some sectors of the market were fearing.
Other major banks were mixed, with ANZ Banking Group firming 15 cents, or 0.8 per cent, to $19.00 ahead of its fiscal 2008 results tomorrow.
Commonwealth Bank of Australia fell $1.30, or 3.01 per cent, to $41.89, and Westpac Banking Corporation lost $1.07, or 4.63 per cent, to $22.05 while its takeover target St George Bank weakened $1.03 or 3.36 per cent to $29.60.
Shares in Rio Tinto surged by $4.04, or 5.43 per cent, to $78.40.
"There's clearly a large buyer in the market," Mr Anderson said, adding that it was probably an offshore buyer and likely to be from China.
"I think people have caught on that it is trading at too much of a discount to BHP's bid and, although the European approval is still some time away, I think we've cleared the major hurdle with Australian regulatory approval," he said.
"BHP is clearly in the box seat now, being a very diversified and well regarded miner, whereas Rio is a little more exposed."
Shares in BHP Billiton closed $2.06, or 7.03 per cent, lower at $27.25.
The world's largest miner reported first quarter production figures today, saying it is confident the industrialisation of China will continue to drive demand for its products. It also said there would be volatility and uncertainty in the short term as global growth slowed.
In the US overnight, mixed corporate earnings and gloomy outlooks reminded investors of economic troubles despite massive actions by governments to combat the financial meltdown.
The Dow Jones Industrial Average fell 231.77 points, or 2.5 per cent, to 9,033.66 and the broad Standard & Poor's 500 index slid 30.35 points, 3.08 per cent, to 955.05.
New York's main contract, light sweet crude for delivery in November, lost $3.36 to close at $70.89 per barrel. The contract expired at the close.
The oil majors lost ground, with Woodside Petroleum down $1.67, or 3.93 per cent, to $40.85, Santos losing 33 cents to $11.72, and Oil Search 37 cents, or 9.18 per cent, lower to $3.66.
At 1615 AEDT, spot gold was trading in Sydney at US$762.00 an ounce, down US$31.00 on yesterday's close of US$793.00.
Local gold miners suffered heavy falls, with Newcrest Mining 8.63 per cent, or $1.93, lower at $20.44, Newmont Mining fell 18 cents, or 4.09 per cent, to $4.22, and Lihir Gold shed 9.75 per cent, or 19.5 cents, to $1.80.
In company news, Macarthur Coal Ltd, the supplier of more than a third of the world's pulverised coal, says demand remains strong, after delivering a rise in output during the third quarter.
Macarthur Coal finished 9.89 per cent, or 63 cents, stronger at $7.00.
Country Road Ltd posted a 22.4 per cent jump in sales in the September quarter, but it expects the next six months to be much tougher.
Country Road shares were untraded at $3.54.
Among local retailers, the only company to move into positive territory was The Reject Shop, up 18 cents to $10.25.
Wesfarmers lost 70 cents, or 3.14 per cent, to $21.60, rival Woolworths fell 96 cents, or 3.42 per cent, to $27.11 and David Jones Ltd plunged 21 cents, or 6.46 per cent, to $3.04.
Airline stocks moved higher, with Qantas putting two cents to $2.85 and Virgin Blue Holdings advancing 0.5 cents to 32.5 cents.
Media companies lost ground, with Fairfax Media Ltd easing two cents to $2.11, Consolidated Media dropping 14 cents to $1.83 and News Corporation falling 70 cents, or 4.76 per cent, to $14.00.
News' non-voting stock fell 34 cents to $13.70.
At 1615 AEDT, the most traded stock by volume was Valad Property Group, with 42.08 million units changing hands worth $3.57 million.
Its stock finished 2.63 per cent, or 0.2 cents, higher at 7.8 cents.
Preliminary national turnover was 1.097 billion shares, valued at $3.79 billion, with 351 stocks up, 631 down and 261 unchanged.
- AAP
