Australia: Shares down as oil, metals dip; NZ stocks hit record high

[SYDNEY] New Zealand shares hit a fresh record high on Monday propelled by yield-hungry investors, while Australian shares slipped 0.5 per cent as mining and energy companies were hurt by weaker metals and oil prices.

New Zealand's benchmark S&P/NZX 50 index was up 10.09 points, or 0.2 per cent, at 6,633.59 as of 0204 GMT after touching a record 6,649.61, and looked set for its third session of gains.

Investors are shifting funds out of bank deposits and into shares in search of higher returns as interest rates have been cut to record lows, said Grant Williamson, a broker at Hamilton Hindin Greene. "I think we'll find that will continue for a while, because as term deposits mature people are looking to see what alternatives there are, given what the banks are offering is pretty low," Williamson said.

Logistics group Mainfreight and insurer Tower led the market up.

In Australia, the S&P/ASX 200 index fell 27.42 points to 5,155.70 by 0209 GMT, more than wiping out last Friday's gains. Volume was thin at the start of a holiday-shortened week. "We're going to be range-bound for the entire calendar year," predicted Don Williams, chief investment officer at Platypus Asset Management.

He said there was little to drive the market higher as share price valuations were factoring in higher earnings growth than was achievable this year. "The best of the earnings growth has been seen, and it's just going to be a tougher year this year," Williams said.

Three of the big four banks dropped more than 1 per cent, while Westpac Banking Corp fell 0.4 per cent.

The top two miners, BHP Billiton and Rio Tinto , both fell around 1 per cent.

Energy stocks were among the biggest losers, with AWE Ltd and Beach Energy both off about 5 per cent.

Virgin Australia jumped 9.3 per cent to A$0.38 after securing a A$425 million ($323 million) loan facility from its four major shareholders: Air New Zealand, Etihad Airways, Singapore Airlines and Virgin Group, giving it breathing room to review its capital structure.

Air New Zealand, which provided nearly a third of the facility in line with its stake in Virgin, rose 1 per cent.

REUTERS