Weak Commodities Drag Australian Indexes Lower

Marcus Jacob
20 Mar, 2013
New York City

Australian market indexes traded lower on the growing uncertainties in the euro zone and rising worries of weak demand growth for commodities in China. Resource sector stocks fell sharply on the worries that the iron ore prices may dip to $120 a ton in the next few weeks.

[R]6:30 PM Sydney – Australian market indexes traded lower on the growing uncertainties in the euro zone and rising worries of weak demand growth for commodities in China.[/R]

Australian market indexes traded lower on the growing uncertainties in the euro zone and worries that Russian resource companies may not be able to withdraw its capital from banks in Cyprus.

Resource linked companies fell sharply in Sydney trading after Cypriot lawmakers voted down the proposal to tax depositors as a part of a 10 billion euro bailout.

The latest decision throws the bailout in a limbo as troika of international lenders demand higher corporate taxes and stiff conditions against money laundering in Cyprus.

Banks are likely to remain close till the end of the week and Cypriot president and European lenders are expected to revised terms of agreement this week.

In addition, markets were unnerved after speculation that Chinese demand for iron ore is likely to be softer than expected as steel production is expected to weaken, according to several brokerage firms.

The ASX 200 index fell 20.10 to 4,967.30 and the broader All Ordinaries slid 21.80 to 4,982.56.

Australian dollar traded near one-month high and closed at $1.038.

Stock Movers

Rio Tinto declined $1.18 to $57.48 and BHP dropped 93 cents to $33.62. Fortescue Metals Group slipped 9 cents to $3.80.

Woodside Petroleum fell 30 cents to $36.25 and Santos slumped 9 cents to $12.65.

Newcrest Mining closed unchanged at $22.50. Kingsgate increased 5 cents to $3.99 and Whitehaven Coal slid 4 cents to $2.28.

David Jones Limited jumped 12 cents or 4.1% to $3.08 and Breville Group rose 7 cents to $5.41. Billabong slid 3 cents to 81 cents and Globe International closed unchanged at 40 cents.

Woolworths added 12 cents to $33.97. Kathmandu fell 2 cents to $1.97.

Toll Holdings slipped 16 cents to $5.69, Leighton up 3 cents to $21.93 and Mirvac Group lowered 1 cent to $1.64. Lend Lease down 4 cents to $9.87.

Westpac gained 8 cents to $29.94, Commonwealth fell 0.03% to $69.16 and National Australia Bank slipped 0.2% to $30.49 and ANZ closed unchanged at $27.83.

Macquarie Group increased 13 cents to $36.98 and Wesfarmers up 1 cent to $41.10.