(Adds details, comments, stocks on the move)
SYDNEY May 27 Australian shares fell 0.8
percent on Monday, extending last week's sharp decline to
one-month lows on concerns the U.S. Federal Reserve may scale
back its stimulus measures, with losses led by the financial
Trading was relatively subdued ahead of a public holiday in
the United States.
Defensives also suffered extensive losses. Australia's sixth
biggest company, Telstra Ltd fell 0.8 percent while
biotechnology firm CSL Ltd lost 1.2 percent. Consumer
retail staples Woolworths Ltd dropped 1.5 percent to
trade at 3-month lows, while Wesfarmers Ltd dived 1.2
percent to 6-week lows.
"I think it's just more of a continuation from what we're
seeing from last week. There's a fair bit of international
selling now of the high income or the yield play on our market,"
said Peter Esho, investment adviser at Wilson HTM Investment
The S&P/ASX 200 index faltered 39.9 points to
4,943.6 by 0126 GMT. The benchmark lost 3.8 percent last week -
the biggest weekly drop in a year.
The local index was weighed down along with the rest of the
region. The MSCI's broadest index of Asia-Pacific shares outside
Japan slipped 0.3 percent.
Japan's Nikkei index slid 3.0 percent in early trade on
Monday, following on from a 3.5 percent slide last week in
breath-taking volatitlity that has also left many investors
Global iron ore miners BHP Billiton Ltd and Rio
Tinto fell 0.8 percent and 2.4 percent, respectively
after Shanghai steel futures posted their second weekly loss,
pressured by slow Chinese demand that is unlikely to pick up any
time soon as the economy loses steam.
Financials dragged on the market. Westpac Banking Corp
lost 1.1 percent while top lender Commonwealth Bank of
Australia fell 0.6 percent.
The banking sector has enjoyed a recent rally on the back of
strong earnings reports and high dividend yields.
"There's also pressure or speculation mounting around the
sustainability of banking margins, earnings and growth, on top
of dividends and how much they've been bid up," Esho noted.
The S&P 500 declined for a third day on Friday, with the
three major U.S. stock indexes posting their first negative week
since mid-April on lingering concerns that the U.S. central bank
may scale back its stimulus measures.
New Zealand's benchmark NZX 50 index declined 0.7
percent or 33.5 points to 4,492.7.
STOCKS ON THE MOVE
* David Jones stumbled 3.9 percent to A$2.48, its
lowest trading price since early February. Australia's No.2
department store chain on Monday reported a 3.4 percent fall in
its third-quarter sales, as a mild start to winter affected its
womenswear business and electronics sales continued to come
* Sundance Resources Ltd soared 11.3 percent to
A$0.09. The international iron ore company said it has been
approached by numerous groups with interest in becoming involved
in the Mbalam-Nabeba project.
* Trust Company Ltd fizzled 3.3 percent to A$6.38
after the company announced Equity Trustees has
extended its initial offer until Wednesday July 31, 2013.
(Reporting by Thuy Ong; Editing by Jacqueline Wong)