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Australia shares take breather with banks dragging, gold miners up
March 13, 2013 / 6:16 AM / in 5 years

Australia shares take breather with banks dragging, gold miners up

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SYDNEY, March 13 (Reuters) - Australian shares closed 0.5 percent lower on Wednesday as investors took profits from a recent rally in the financial sector, but gains in mining stocks helped contain the weakness.

Westpac Banking Corp, Australia’s third-largest lender by assets, posted the biggest loss among its “Big Four” peers, dropping 2.1 percent.

National Australia Bank fell 1.9 percent, despite saying on Wednesday it would overhaul its organisational structure, operating model and group executive team to cut costs.

Analysts said the market was simply taking a break after the recent rally, which pushed the index to a 4-1/2-year high on Monday.

“It’s just taking a bit of breather, but it’s exactly what we want to market to do,” said Martin Lakos, division director at Macquarie Private Wealth in Sydney.

“We are quite positive upon the financials in the terms of the global growth and global markets picking up,” he added.

The S&P/ASX 200 index fell 25.5 points to 5,092.4, according to the latest data. It fell 0.6 percent on Tuesday.

The market has risen 9.5 percent this year, aided by a relatively strong earnings season and growing optimism in towards the global economy.

Stronger metal prices pushed blue chip miners BHP Billiton Ltd and Rio Tinto Ltd up 0.7 percent and 0.93 percent respectively, helping to stabilize the benchmark index.

Meanwhile, BHP Billiton confirmed that the U.S. government is investigating the company for possible corrupt practices, after media reports said its sponsorship practices in the 2008 Beijing Olympics were under scrutiny.

Gold stocks outperformed in response to strength in the precious metal. Newcrest Mining Ltd led the bullion sector higher, up 2.9 percent, and Regis Resources Ltd advanced 2.5 percent.

Consumer staples pulled back slightly, with Woolworths Ltd edging down 0.2 percent. Rival Wesfarmers Ltd ended the day flat.

Australia’s biggest phone company Telstra Ltd gained 1.1 percent.

Southern Cross Media Group Ltd dived 7.0 percent, as investors worried about the prospect of a possible merger with city-based Nine Entertainment, which would require Australia’s media ownership laws to be changed.

But Australia’s Communications Minister on Tuesday deferred a decision on changes to media diversity rules as part of the government’s proposed media reform programme .

Blackthorn Resources surged 7.5 percent after announcing Glencore will provide $80 million to fund work needed to complete its Perkoa zinc mine project in Burkina Faso.

New Zealand’s benchmark NZX 50 index fell 0.9 percent to 4,341.1.

Shares in New Zealand telecommunications company Telecom Corp Ltd plunged 6.1 percent, after it said it would restructure the Australian operations of its Gen-I unit, with around 120 jobs lost and a material one-off cost. (Reporting by Maggie Lu Yueyang; Editing by Eric Meijer)

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