Australia: Stocks down 1.09% as China worries grow

[SYDNEY] Australian stocks dropped 1.09 per cent at the open Thursday with the rout on Chinese markets and a slumping iron ore price shifting focus away from Greece and its debt crisis.

The benchmark S&P/ASX200 index was 59.8 points lower at 5,409.7 soon after the start, adding to its two percent loss on Tuesday, with the impact of panic selling in China weighing heavily on commodity prices.

Australia is a leading global producer of iron ore, and a 10 per cent slump in its price overnight to a more than five-year low of US$44.59 a tonne is hurting big miners in the resource-rich country.

"The risk from Chinese equities markets is clearly impacting commodities markets," said IG Markets strategist Evan Lucas.

"Iron ore has just logged its worst trading day on record." Among the miners, BHP Billiton was down 0.9 per cent at A$25.2 while Rio Tinto was 1.26 per cent lower at A$49.43, both near yearly lows.

In early trade the Australian dollar was slightly higher at 74.24 US cents from 73.84 US cents late Wednesday, while it was buying 67.04 euro cents, unchanged from the day before.

AFP