Australia: Shares hit 1-1/2 mth low on commodities, US rate hike risk

[WELLINGTON] Australian shares tumbled over 2 per cent on Friday, pulled lower by plunging commodity prices as both both gold and copper hit multi-year lows and growing expectations of an interest rate hike in the United States next month.

Investors hammered Santos shares for a second day after a A$1.17 billion (S$1.18 billion) institutional raising diluted earnings amid falling crude prices. It was last down 7.2 per cent.

In a broad sell-off, the S&P/ASX 200 index skidded 100.99 points to 5,023.1 by 2135 GMT, its lowest level since Sept 29. The benchmark is on track for its worst weekly performance in more than two months. "We've seen big falls in commodities overnight and there is a prospect of higher interest rates in the United States. Overall the market is reacting on the backdrop of a softer global economy," said Julia Lee, market analyst at Bell Direct. "The next psychological level for the market is 5,000 and we are not too far from that. November tends to be a seasonally weak month but we are expecting to see another rally into December." Global miner BHP Billiton was battered for a third straight day, hitting a 7-year trough, following a fatal dam disaster at a joint venture mine in Brazil. It was last down 3.5 per cent at A$19.90.

Rio Tinto was off 2.3 per cent, while Fortescue Metals slipped 5.5 per cent. Energy-related shares were in the red as well with Woodside Petroleum down 3.4 per cent and Origin Energy slipping more than 4 per cent.

Major banks Commonwealth Bank and ANZ fell over 2 per cent each. Westpac was down 1.5 per cent while National Australia Bank was off 1.6 per cent.

For more individual stocks activity click on New Zealand's benchmark NZX 50 index slipped 0.2 per cent or 12.99 points to 6,010.97, pulling further away from a record peak hit earlier this week.

It is on track to end the week about 1 per cent lower after a steep fall on Tuesday, which would be its worst performance since the week ended Oct 2.

For the year so far, the index is still up nearly 8 per cent compared with a drop of more than 6 per cent for its Australian cousin.

a2 Milk Company remained the top most-traded stock for a fourth straight session, but fell on Friday after a strong 3-day run. It was last down 2.2 per cent at NZ$0.89.

New Zealand Refining Company, the top performer on the index, hit a 3-1/2 year high on Friday on stronger production guidance for the year.

REUTERS