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Euro zone fears hit Australian shares as Italy heads for deadlock
February 26, 2013 / 1:15 AM / in 5 years

Euro zone fears hit Australian shares as Italy heads for deadlock

(Adds details, comments, stocks on the move)
    SYDNEY, Feb 26 (Reuters) - Australian shares lost 0.8
percent on Tuesday after Wall Street suffered its biggest fall
since November over worries of renewed instability in the euro
zone following Italian elections which appeared poised to return
a deadlocked parliament.
    A huge protest vote by Italians enraged by economic hardship
and political corruption left no coalition strong enough to form
a government following Monday's election. 
    "There's an argument going on among traders at the moment.
Was the Italian election result a cause or an excuse for
something the market wanted to do?" said Michael McCarthy, chief
market strategist at CMC Markets.
    "Because the market has run so hard we were due for a pull
back." 
    The financials dragged on the index, with top lender the
Commonwealth Bank of Australia posting the biggest loss
of 1.1 percent. 
    Global iron ore miners BHP Billiton Ltd and Rio
Tinto Ltd lost 1.3 percent and 1 percent respectively.
Port terminals used by both miners have been shut as a cyclone
bears down on the iron-rich Pilbara region of Western Australia.
 
    The benchmark S&P/ASX 200 index was 42.7 points
lower at 5,014 at 0044 GMT, trimming losses from earlier in the
session.
    "Twice now the pullback has respected the key break out
level of 4,976, this morning's low of 4,978 is within a whisker
of that," said McCarthy.
    "But the fact that we've been able to bounce off it and hold
above indicates to me that the underlying strength in the market
remains."
    The resistance levels are at 4,976 and 5,025 points, he
said.
    "[They are] the previous levels the market had failed at.
When the market trades through a resistance level, it becomes a
support level."
    Gold miners underpinned the market, Newcrest Mining 
jumped 2.4 percent while rival gold producer Medusa Mining
 soared 5.8 percent. The bullion rose about 1 percent on
Monday, extending to a third day of rallies, as a sharp pullback
in U.S. equities and uncertainty over the outcome of Italy's
election led to resurgent safe-haven buying. 
    U.S. stocks fell on Monday, reversing course from earlier
gains as the elections in Italy stoked concerns for the euro
zone's stability. 
    New Zealand's benchmark NZX 50 index slipped 0.3
percent or 12.5 points to 4,213.9.
    
    
    STOCKS ON THE MOVE
    * QBE Insurance lost 2.8 percent to A$12.66 after
the insurer reported an 8 percent rise in net profit to $761
million. 
    (0042 GMT)
    
    * Whitehaven Coal Ltd dropped 2.2 percent to
A$2.935 after the miner reported a first-half loss on Tuesday,
whacked by weak coal prices and a strong Australian dollar, but
said it is back on track to start construction of its key growth
project in mid-2013. 
    (0042 GMT)
    
    * Seven Group Holdings added 2.2 percent to
A$10.27. The media company reported a 47 percent rise in
first-half profit before one-offs to A$234 million, underpinned
by its WesTrac mining equipment business. 
    (0042 GMT)
    
    * Origin Energy fell 2 percent to A$11.65. The gas
and energy utility announced a $200 million agreement to sell an
additional portion of its oil and condensate production.
 
    (0043 GMT)
    
    * Virgin Australia Holdings Ltd fell 4.1 percent to
A$0.42. The airline carrier posted a H1 revenue of $2,106
million but cited uncertainty in economic conditions and a
competitive environment as obstacles to growth. 
    (0043 GMT)
    
    * Atlas Iron dropped 4.4 percent to A$1.53 after it
reported a first-half underlying profit of A$1 million and said
talks on building or accessing a rail line for its planned iron
ore expansion were progressing. 
    (0043 GMT)
    
    * Ramsay Health Care fell 0.8 percent to A$30.35.
The private hospital operator reported a 12 percent rise in core
net profit to A$148.2 million and raised full-year guidance for
core profit growth to 13 percent to 15 percent from its previous
guidance of 10 percent to 12 percent.
    (0043 GMT)
   

 (Reporting by Thuy Ong; Editing by Stephen Coates)

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