(Adds details, comments)
SYDNEY, April 4 Australian shares dropped 0.9
percent on Thursday, pulled down by weaker commodities' prices
and broader concern over rising tensions on the Korean
Strong Australian retail and building data failed to lift the
market, as the startling numbers led investors to further
lengthen the odds of any more cuts in interest rates this cycle.
"It (the market) tried half-heartedly to rally after some
very strong February building approval and retail sales numbers,
but could not sustain the goodwill," said Chris Weston, chief
market strategist at IG Markets in Melbourne.
Weston also noted that traders have been discussing a large
sell order being executed through the market by a fund.
Copper fell to an eight-month low overnight, pushing
speculators to take more short positions ahead of a two-day
holiday in China, and oil was down most in five months on
Wednesday as U.S. inventory rose to its highest since 1990.
Developments on the Korean peninsula added to investor
worries, said Martin Lakos, a division director at Macquarie
Bank. "We saw that from VIX in the U.S. The volatility index was
up another 1.5 points, so still fairly low, but over 14 now," he
The S&P/ASX 200 index lost 44.2 points to close at
4,913.5, according to the latest data. The benchmark dropped 0.6
percent on Wednesday.
New Zealand's benchmark NZX 50 index ended 0.4
higher at 4,430.2.
Australia's big four banks all pulled back, with Westpac
Banking Corp posting the biggest loss of 1.2 percent.
Top lender Commonwealth Bank of Australia gave up
earlier gains and declined 0.5 percent.
Despite the sell-off, some analysts still believe miners
look attractive in the longer term.
"I think it's just more the short-term profit taking and
also near-term concerns that have driven the weakness," said
CommSec economist Savanth Sebastian in Sydney. "The Chinese
growth story is going to be a big driver. Resource stocks will
be well bid."
Global miners BHP Billiton Ltd and Rio Tinto Ltd
dropped 1.5 percent and 1.4 percent respectively.
Fortescue Metals Group Ltd ended down 3.3 percent.
Gold stocks were hit hard after bullion dropped to a
ten-month low, with the world's No 3 gold miner Newcrest Mining
Ltd dropping 5.2 percent.
"We had a big bubble-play over the last couple of years, and
that turned gold into a safe haven, but people start to lose
faith in the fact that there is a real safe haven there," said
Jonathan Preston, an analyst at City Index in Sydney.
Junior gold miners Silver Lake Resources Ltd and
Discovery Metals Ltd dived 16.8 percent and 13.9
percent respectively, making them the biggest percentage losers
in the index.
Energy stocks were hit by weaker oil prices, with
Australia's biggest oil producer Woodside Petroleum Ltd
losing 0.7 percent and the smaller Origin Energy Ltd
down 2.7 percent.
Some consumer staples advanced, with supermarket chain
Woolworths Ltd gaining 0.9 percent and home furnishing
retailer Harvey Norman Holdings Ltd jumping 2.5
Australia's Fairfax Media dropped 1.6 percent after
the company said it is reorganising its business into five
divisions to streamline its structure, focus on digital content
and cut costs.
(Reporting by Maggie Lu Yueyang and Michael Sin; Editing by