Australia, NZ: Australia shares weighed by oil, iron ore, NZ stocks shine again

[SYDNEY] Australian shares dropped 1.3 per cent on Tuesday, as recent weakness in oil and iron ore prices took a heavy toll on the resources sector, in contrast to New Zealand where stocks scaled a record peak.

The S&P/ASX 200 index slid 68.458 points to 5,117.600 by 02:32 GMT, away from a 10-week peak touched on Monday.

The energy and material indices were the hardest hit each with a loss of 1.7 per cent. Among the worst performers, oil and gas companies Oil Search, Santos and Woodside fell between 1.8 and 2 per cent, followed closely by engineering firm WorleyParsons.

Miners were also sharply lower with BHP Billiton off 2.2 per cent, while fellow global miner Rio Tinto slid 1.8 per cent. Fortescue Metals shed 0.4 per cent after Moody's downgraded its ratings.

Oil prices bounced from lows on Tuesday, but investors were concerned that a recent rally may have run out of steam.

The major banks were not spared either, with all big four lenders down between one per cent and 2 per cent.

Ports and rail freight company Asciano Ltd, however, leapt 1.3 per cent after it received a A$9.1 billion (S$9.36 billion) takeover offer by Qube Holdings, Canada's Brookfield Asset Management Inc and international partners.

For more individual stocks activity click on New Zealand's benchmark S&P/NZX 50 index rose 0.3 per cent or 19.1 points to 6,585.43. It touched, yet again, a new record of 6,607.86 with the index up 4 per cent so far this year.

The biggest gainers were SkyCity, which added 4.9 per cent and Spark, which added 1.7 per cent. Investors are turning to high yielding stock in a bid to offset the low interest rate environment after the central bank cut interest rates to a record low 2.25 per cent last week.

In the other direction, Fletcher Building shed 0.4 per cent and Auckland Airport was trading down 0.2 per cent.

REUTERS