Australia: Weak commodities pummel shares

[SYDNEY] Australian shares retreated on Tuesday as commodity prices fell, while New Zealand stocks set a fresh record high.

Trading volume is likely to remain thin this week with many investors away for New Year holidays. The market will be closed on Thursday.

At 0118 GMT, the S&P/ASX 200 index was off 0.4 per cent, or 21.38 points, to 5,452.4, but held near a seven-week peak of 5,486.7 touched in early trade.

The benchmark rose 1.5 per cent on Monday and after having drifted between negative and positive territory this month, it looked on track for a gain of around 2 per cent for 2014.

Still, the Australian share market was poised to finish around the half-way mark of global share markets. CommSec's Chief Economist Craig James said the softer performance was due to lower commodity prices, which pressured resources shares.

Prices of iron ore, Australia's top export, have tumbled 50 per cent this year, while oil dropped to five-year lows.

Miners Fortescue Metals Group, BHP Billiton and Rio Tinto all shed more than 1 percent in the session.

Not helping sentiment was political uncertainty in Greece. Grocer Woolworths, conglomerate Wesfarmers and telecommunications company Telstra all nudged down 0.2 per cent.

Financials was among the very few in the black, albeit with modest gains. The "Big Four" banks - Commonwealth Bank of Australia, Westpac Banking Corp, ANZ Bank and National Australia Bank rose around 0.2 per cent.

New Zealand's benchmark NZX50 share index inched up to a lifetime intraday high of 5,599.03, supported by boardroom services provider Diligent, which posted a 14-month high.

The technology company soared as much as 6 percent to NZ$5.50 (US$4), its highest since October last year, after it placed among domestic brokerages' top share picks for 2015.

Diligent has climbed around 40 per cent so far this year, and market participants see the fast-growing company extending gains next year after overcoming some teething problems, including results reporting issues, in past years.

Further gains in the index were capped by a 3.5 per cent slide in A2 Milk to NZ$0.56, as the specialised milk processor remained under selling pressure due to sliding global dairy prices.

Vital Healthcare Property Trust fell 1.6 per cent to NZ$1.57 as investors booked profits in the health-related property investor after it scaled a lifetime high of NZ$1.60 last week.

New Zealand markets will be open for a half day on Wednesday, and will be closed on Thursday and Friday for the New Year holiday.

The NZ50 index is on track to end 2014 around 18 per cent higher, outperforming Australian shares and many global indices thanks to a handful of IPOs and a buoyant economy.

REUTERS