Australia: Shares fall on job data, fears rate cut not enough

[SYDNEY] Australian shares fell to a fresh three-month low on Thursday as soft jobs data spooked investors already concerned that the central bank's latest rate cut may not be enough to revive business confidence.

Unemployment ticked up to 6.2 per cent in April, official data showed, in line with expecations but still a sign that the central bank's suggestion that it will stop cutting rates was premature.

An unexpectedly large rights issue by No.4 lender National Australia Bank, A$5.5 billion, added pressure the finance sector which has shown signs of slowing growth in earnings reports this week. "The selling's pretty fierce," said Quay Equities head of trading Tristan K'Nell. "The RBA cutting does reflect that the economy's not that great, but in February and March, the market did rally really hard and while we saw some down days in April, there was no harsh profit taking."

After falling 2.3 per cent a day earlier, its biggest drop in two years, the S&P/ASX 200 index shed another 39.8 points or 0.7 per cent to 5652.4 by 0232 GMT. The benchmark has fallen 6 per cent in the past month.

While NAB was in a trading halt, the other "Big Four" banks - Commonwealth Bank of Australia, Westpac Banking Corp and Australia and New Zealand Banking Group - fell about half a percentage point.

Global investment bank Macquarie, which reports full-year results on Friday, dropped nearly 2 per cent.

Miners also declined as economic concerns outweighed a jump in the closely watched iron ore price. BHP Billiton fell 1 per cent and Rio Tinto dropped 0.5 per cent, while gold miner Newcrest Mining tumbled 2.5 per cent.

US-focused building materials maker James Hardie Industries tumbled nearly 3 per cent after weak US economic data overnight.

New Zealand's benchmark stock index slumped 1 per cent to a three-month low of 5,704.76, following offshore market weakness and the global drop in government bond prices.

Telecommunications provider Spark, the No.2 stock, led the decline, falling 3.7 per cent, while top stock Fletcher Building was down 1.2 per cent.

Small-cap telecommunications concern TeamTalk bounded 20 per cent higher on modest volumes after saying it was on track to meet earnings guidance.

Small-scale bank Heartland was put on a trading halt after a significant shareholder, Quadrant Equity, said it was looking to sell a 9 per cent stake.

REUTERS