Australia: Shares down in rocky trade as China, US worries hit earnings season

[SYDNEY] Australian shares fell in volatile trade on Wednesday as concerns about a selloff in US and Chinese markets outweighed hopes for a recovery in commodities prices.

A mixed bag of local earnings reports and several large stocks trading ex-dividend also contributed to the unusually rocky session.

After tumbling as much as 1.6 per cent in early trading, the S&P/ASX 200 index rebounded into positive territory as Chinese stocks opened higher following rate cuts by the central bank.

But the recovery was short-lived as Chinese indexes resumed their slide, and by 0240 GMT the Australian benchmark down 42.4 points or 0.8 per cent at 5,096.9.

"The reality is there are a lot of contributors to this,"said CMC chief market strategist Michael McCarthy, noting that a correction in US stock markets had been overdue.

Overnight, the Dow Jones Industrial Average fell more than 1 per cent after rallying sharply earlier in the session.

Banks and industrial property players led the declines with Australia and New Zealand Banking Group down 1.4 per cent and Westpac Banking Corp and National Australia Bank both down 0.8 per cent.

Property developers Mirvac Group and Dexus Property Group were down 2.2 per cent.

Health stocks also fell after posting disappointing earnings. Primary Health Care was 5 per cent lower while hospital operator Healthscope dropped 1.4 per cent.

Telecommunications giant Telstra, which traded ex-dividend this week, lost 1 per cent.

Grocery majors Woolworths and Coles owner Wesfarmers were down 1.4 per cent and 0.6 per cent respectively.

Resources companies were mixed.

BHP Billiton firmed 0.4 per cent as bargain hunters picked up the stock following a hefty selldown in the lead-up to the profit slump it posted a day earlier. Rival Rio Tinto was down 0.3 per cent and iron ore producer Fortescue Metals Group fell 1.1 per cent.

New Zealand's benchmark NZX50 index eased 0.2 per cent to 5,600.70 in early trade, but losses slowed after a deep sell-off seen earlier in the week pulled the index down to 5,607.31, its weakest close since early January.

Losses were led by a 1.9 per cent slide in Sky TV after analysts cut their price targets for the television service provider a day earlier.

Air New Zealand slipped 1.1 per cent, as investors brushed off an announcement by the national carrier of record annual profits and bought shares in other companies sold off heavily in recent days.

Further index losses were offset by gains in telecoms company Spark, up 1.8 per cent, and power retailer Meridian, which climbed 1.9 per cent.

Retirement village operator Metlifecare rose 1.6 per cent after it reported a 78 per cent rise in annual profit.

Medical equipment maker Ebos jumped 3.8 per cent after reporting a 15 per cent rise in annual profit.

REUTERS