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Australia: Shares fall as commodities slide hits resources
[SYDNEY] Australian shares fell on Wednesday as slumping oil, copper and gold prices dragged down resources stocks while concern that BHP Billiton may stop increasing dividends sent the world's largest miner to a seven-year low.
A bomb scare in Europe only days after the deadly Paris attacks also put investors in a cautious mood, preferring to invest in safe-haven US bonds and the dollar.
Overnight, the prices of copper, iron ore, oil and gold hit multi-year lows on a combination of geopolitical concerns and expectations that demand from key importer China would slow.
By 0100 GMT, the S&P/ASX 200 index was down 23.6 points or 0.5 per cent to 5,094.6, giving up part of the previous day's 2.3 per cent rally. The benchmark is down 6 per cent this year.
"All the commodities last night had a shocker, and it's transferred into our equity market," said IG Markets strategist Evan Lucas. "BHP is probably, from an equity side, the biggest concern around. It is really, really under huge pressure," he said.
BHP shares were down 2.7 per cent at A$19.83 after hitting their lowest intraday level since 2008. The stock failed to trade over A$20.00, having last closed below that level in 2005.
At its annual shareholder meeting on Thursday, the miner is expected to face intense questioning about a fatal dam collapse at a Brazil mine it partly owns and about whether BHP can maintain its policy of steadily raising dividends.
Rival Rio Tinto was down 2 per cent, while world No. 4 iron ore producer Fortescue Metals Group slid 3 per cent.
Energy stocks fared little better, in line with the oil price decline. Woodside Petroleum was down 1 per cent, Oil Search dropped 1.5 per cent and Santos eased 0.7 per cent.
Retailers also declined, with No. 1 grocer Woolworths down 0.6 per cent and Wesfarmers, which owns smaller rival Coles, off 1 per cent.
Westpac Banking Corp fell 1 per cent while Commonwealth Bank of Australia and National Australia Bank were steady.
New Zealand's benchmark NZX 50 index rose 0.2 per cent or 9.5 points to 5,977.10.
The biggest gainers were Steel & Tube, up 2.3 per cent, and A2 Milk, which continued to benefit from upbeat guidance on Tuesday, adding 1 per cent.
Among the biggest losers were accounting software firm Xero , down 0.9 per cent, and Mighty River Power, down 1.4 per cent.