Australia: Shares fall as US, commodities weakness prompt selling

[SYDNEY] Australian shares fell the most in nine weeks on Monday as investors continued to cash in on recent multi-year highs, while upbeat US jobs data raised expectations the Fed will raise rates sooner rather than later.

Large resources stocks also weighed down the benchmark index after iron ore hit a record low following reports of Chinese steel mill closures. "There's not may green lights today as it's pretty much across the board," said Quay Equities senior dealer Andrew West, referring to the losses. "Iron ore is very weak and we've got oil down, so the commodities are very weak," Mr West added.

By 0111 GMT, the S&P/ASX 200 index was down more than one percent or 64.8 points at 5834.1, its biggest fall since Jan 6. The index reached a 7-year closing high a week earlier.

On Friday, US stocks closed 1.5 per cent lower after a strong monthly jobs report prompted investors to bet that the Federal Reserve may raise interest rates sooner than expected.

All the so-called "Big Four" Australian banks, which write more home loans when interest rates go down, were lower after reaching record levels in recent weaks. Commonwealth Bank of Australia and Australia and New Zealand Banking Group were both down 0.7 per cent while Westpac Banking Corp and National Australia Bank dropped 0.8 per cent each.

Iron ore majors BHP Billiton and Rio Tinto RIO.AX. dropped nearly 2 per cent following the iron ore price decline, while gold giant Newcrest Mining followed the spot gold price lower, falling 4 per cent.

Energy firm Santos fell 3.7 per cent and Origin Energy declined 3 per cent after the oil price fell.

New Zealand's benchmark NZX50 index was modestly lower, down 0.2 per cent to 5,892.44, in sight of last week's record high.

Among the leading stocks were a 2.75 per cent fall for software company Xero to NZ$24.01. Smaller declines for telecommunications company Spark, Fisher & Paykel Healthcare and Auckland International Airport offset solid gains for Fletcher Building and Contact Energy.

Small-cap online travel booking company Serko, which listed last year, plunged as much as 9.8 per cent after it said full year revenue would fall short of forecasts. It last traded down 3.8 per cent at NZ$1.01.

REUTERS