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SYDNEY, June 24 Australian shares dropped 1.5
percent on Monday as investors remained anxious about the
Federal Reserve's plans to taper monetary stimulus and slowing
growth in China, causing financial and mining stocks to fall.
"Traders are still not warming to the idea of QE tapering as
put forward by Bernanke last week," said Tim Waterer, senior
trader at CMC Markets.
Financials dragged, with top lender Commonwealth Bank of
Australia slipping 0.5 percent while National Australia
Bank Ltd dropped 1 percent. Westpac Banking Corp
fell 0.6 percent.
BHP Billiton Ltd dropped 3.4 percent while rival
Rio Tinto Ltd lost 2.1 percent. Newcrest Mining
tumbled 7.9 percent to near 10-year-lows of A$9.53, in
an almost uninterrupted decline since 2011.
"Commodity prices have been weak for a while now, they're
not improving and that's weighing on our miners," said Peter
Esho, investment adviser at Wilson HTM Investment Group.
Rio Tinto has scrapped the proposed sale of its $1.3 billion
diamonds business, a setback for its plan to sell a collection
of mines and company stakes to tighten operations during a
global industry downturn.
The S&P/ASX 200 index dived 69.7 points to close
near 10-day lows at 4,669.1. The benchmark fell 1.1 percent last
The local bourse fared slightly better than the rest of the
region. MSCI's broadest index of Asia-Pacific shares outside
Japan was down 1.8 percent, after last week
being it worst since May 2012 with a drop of 4.5 percent.
The Fed's plan to cut back on how much cheap money it pumps
into the world's biggest economy has raised concerns about the
impact on growth and prompted sharp adjustments in global asset
"While the withdrawal of stimulus at some point is
inevitable, this is still not something the market wants to
contemplate given the less than impressive economic indicators
we have witnessed from the U.S. and also China recently," CMC
Markets' Waterer said.
However, stocks with exposure to the U.S. edged higher -
helping to cap broader losses - supported by a weaker Australian
dollar as earnings from abroad are boosted when repatriated
home. Blood products maker CSL Ltd climbed 2.4 percent.
Westfield Group was up 0.8 percent
The Australian dollar remained little changed against the
dollar at $0.9218, holding above a 33-month trough of
$0.9163 last week.
Australian insurance and wealth management company AMP Ltd
plunged 12.9 percent to its lowest point since October
2012 after it warned that first-half underlying profit would
slide due to high claims levels and an increase in number of
policies not renewed.
New Zealand's benchmark NZX 50 index finished flat
or up 1 point to 4,364.
(Reporting by Thuy Ong; Editing by Richard Borsuk)