* S&P/ASX 200 index down 39.2 points at 4,349.2
* Weakest close since Sept. 13
* BHP down 1.8 pct at two-month low; banks down
* Myer at six-month high as Q1 sales please
* Qantas up on share buy back
MELBOURNE, Nov 15 Australian shares fell 0.9
percent to the weakest close in two months on Thursday, with big
miners and banks tumbling on concern over protracted U.S. budget
negotiations and violence in the Middle East.
Investors fear the world's biggest economy could be pitched
back into recession if Congress fails to agree to a budget deal
that could avert a package of tax increases and spending cuts,
otherwise set come into force early next year - the so-called
Top miners BHP Billiton and Rio Tinto both
fell 1.8 percent, BHP hitting a two-month low closing low of
Australian shares are down 5.1 pecent from the 15-month
highs reached in October.
"Markets are reflecting worse case scenarios today with
investors fleeing in droves. Tensions escalating in the Middle
East added to the panic selling," said Ben Taylor, trader at
Brent oil prices rallied as Israel launched a major
offensive against Palestinian militants in Gaza.
The benchmark S&P/ASX 200 index fell 39.2 points to
4,349.2, according to the latest data, the weakest close since
New Zealand's benchmark NZX 50 index slipped 0.1
percent to 3,951.5 points.
National Australia Bank closed at A$23.23, its
weakest since June 26, while Westpac Banking Corp fell
0.9 percent to A$24.64, its weakest since end September.
Gold producer Newcrest Mining sank 4.5 percent to
A$24.31, the softest close since August 7.
Global stocks fell after U.S. President Barack Obama
reiterated his call for the wealthy to pay higher taxes, setting
the stage for a tough budget battle with Congressional
"While the markets were hoping for the Democrats and
Republicans to stop playing hardball and find some middle ground
the opposite seems to be happening. Increasing taxes for the
rich has the two parties in a stalemate and is not something the
market wanted to hear," said Taylor.
Individual shares managed gains.
Myer Holdings jumped 6.5 percent to $A2.13, a
six-month high, after the department store's sales beat
forecasts and it said the trend had continued.
Qantas Airways added 4.1 percent to $1.28 after the
airline said it will spend up to A$100 million in an on-market
share buyback and pay back some debt.
Asciano gained 3.6 percent to A$4.33 after it said
it was on track to meet targets.
(Reporting by Miranda Maxwell; Editing by Simon Cameron-Moore)