(Adds analysis, quotes, stocks on the move)
SYDNEY, March 25 Australian shares fell 0.6
percent on Tuesday morning after Wall Street declined on
escalating tensions in Ukraine and as gold and oil stocks
slumped on the back of a sharp drop in commodity prices.
Gold miners took a heavy beating as bullion prices tumbled
about 2 percent as hedge funds sold the precious metal on bets
that rising U.S. interest rates could spark a further retreat
from last week's six-month high. [IDP:nL4N0MM00D]
Australia's top gold producer Newcrest Mining Ltd
lost 4.4 percent, while OceanaGold Corp dived 9.2
The S&P/ASX 200 index shed 32.7 points to 5,314.2 by
0101 GMT. The benchmark added 0.2 percent on Monday on bargain
The benchmark touched a 5-1/2 year high of 5,462.3 on March
7 but has since drifted lower as the crisis in Ukraine and
concerns over slowing growth in China, Australia's largest
export market, soured investor sentiment.
"I think the main concern is China at the moment, the
Chinese economy has given us a clear sign that it's slowing
down, that's why the demand has been volatile," said Biyi Cheng,
head of dealing for the Asia Pacific at City Index.
Monday's flash Markit/HSBC Purchasing Managers' Index showed
activity in China's factories contracted again in March, falling
to an eight-month low of 48.1 from February's reading of 48.5.
Brent crude oil fell on the lacklustre manufacturing report
from China, the world's largest oil consumer. Australia's top
oil and gas producer Woodside Petroleum Ltd fell 0.7
percent while Santos Ltd shed 1 percent.
The 'Big Four' banks were also down with National Australia
Bank off 0.5 percent and Australia and New Zealand
Banking Group 0.2 percent lower.
"All the 'Big Four' banks are at high levels," Cheng said,
indicating the pull back was largely technically-driven.
"Recently we've had a group of clients building up
short-selling positions on banking stocks."
TPG Telecom Group climbed 8 percent after touching
all-time highs of A$6.35. The telecommunications and IT company
reported healthy first half earnings and upgraded its guidance
for the year. iiNet added 4.5 percent
after analysts said TPG could make a move to buy the rival
internet service provider.
Yancoal Australia Ltd tumbled 6 percent to all-time
lows of A$0.545 as China's Yanzhou Coal Mining Co Ltd
ditched a plan to buy out the minority shareholders
of its Australian arm.
New Zealand's benchmark NZX 50 index slipped 0.1
percent to 5,112.8.
(Reporting by Thuy Ong; Editing by Shri Navaratnam)