(Adds share moves, analyst comments)
SYDNEY May 12 Australian shares fell 0.3
percent on Monday morning, dragged by big miners on soft iron
ore prices and profit-taking in banks, as investors tread
cautiously ahead of the coalition government's first federal
The conservative coalition government of Prime Minister Tony
Abbott will hand down its first budget on Tuesday, with big
spending cuts forecast, along with tax hikes and spending on
"The obvious thing is what the budget will dictate... it's
very quiet pending the release and what is contained within the
budget to what the next move will be with our market," said Tony
Russell, senior equities adviser at RBS Morgans.
The S&P/ASX 200 index lost 15.4 points to 5,445.4 by
0119 GMT. The benchmark dipped 15.9 points to 5,460.8 on Friday.
Bluechip miners BHP Billiton Ltd and Rio Tinto Ltd
declined 1.2 percent and 1.0 percent, respectively,
after spot iron ore fell to its cheapest since September 2012 on
Miners have been under pressure as rising supply of iron ore
and slack demand for steel in top consumer China threatened to
pull prices below $100 a tonne.
Most big banks gave up earlier gains and slipped into the
red. Commonwealth Bank of Australia fell 0.1 percent, and
Westpac Banking Corp declined 0.2 percent. National
Australia Bank bucked the trend and edged up 0.1
"Keeping in mind those banks have had an excellent run over
the last 12 to 18 months, we will probably see a little bit of
profit-taking coming out those as well," Russell said.
Consumer stocks also pulled back, with supermarket chain
Woolworth Ltd skidding 0.4 percent and Coles-owner
Wesfarmers Ltd slipping 0.2 percent.
Leighton Holdings Ltd lost 2.1 percent after the
company said the head of its Thiess subsidiary in India had been
arrested by police and the main client for its Pakri Barwadih
coal mine was attempting to terminate its contract.
Oil and gas producer Dart Energy surged 28.0
percent after Britain's IGas last week agreed to take
over the company in an all-share deal valuing the company at 117
million pounds ($198.35 million).
Explosives producer Incitec Pivot Ltd rose 0.9
percent on news its first-half net profit rose 7 percent to
Kimberley Diamonds Ltd plunged 38.5 percent after
it said it failed to secure price increase for supply of fancy
yellow diamonds with a unit of Tiffany & Co.
New Zealand's benchmark NZX 50 index inched up 0.1
percent to 5,158.3.
(Reporting by Maggie Lu Yueyang; Editing by Shri Navaratnam)