Australian stocks: Market suffers slight fall

MELBOURNE - The Australian share market lost ground, weighed down by financials but with support returning to defensive stocks.

At 1615 AEST, the benchmark S&P/ASX200 was down 10.7 points, or 0.28 per cent, at 3,813.9, while the broader All Ordinaries had lost 4.2 points, or 0.11 per cent, at 3,804.7.

On the Sydney Futures Exchange, the June share price index contract was 10 points lower at 3,824 on volume of 21,251 contracts.

A sell-off on Wall Street and Europe equity markets followed renewed concerns over the health of US banks, IG Markets' research analyst Ben Potter said.

Minutes of the US Federal Reserve meeting on April 28 and 29, released on Thursday revealed officials were not convinced recent signs of stabilisation in the US economy would continue and downside risks to the economy and global financial system remained.

"Broadly speaking, the defensive sectors are performing better than their cyclical counterparts today," Mr Potter said.

"The downgrades to US GDP (gross domestic product) growth, and the unemployment rate is hampering the cyclical sectors."

Speculation surrounding a possible capital raising by ANZ Banking Group led it to buck the trend among local banks, firming eight, or 0.51 per cent, to $15.63.

"Many managers are wanting to reweight toward financials, however, with a heavily discounted ANZ raising expected, they don't want to miss this either," Mr Potter said.

National Australia Bank led the sector lower, down by 37 cents, or 1.68 per cent, to $21.65, Commonwealth Bank lost 60 cents, or 1.66 per cent, to $35.60 and Westpac Banking Group fell 25 cents, or 1.27 per cent, to $19.44.

Resources heavyweight Rio Tinto added $1.85, or 2.86 per cent, to $66.64 as ongoing speculation surrounds the proposed US$19.5 billion (A$25.20 billion) deal to allow the Aluminum Corporation of China (Chinalco) to lift its stake in Rio Tinto to 18 per cent.

Rival BHP Billion put on 20 cents, or 0.58 per cent, to $34.40.

The oil sector was lower despite a rise in the crude oil price to a six-month high overnight to above US$62 a barrel.

Santos eased seven cents to $14.73, Woodside Petroleum lost 41 cents to $44.40 and Oil Search gave up five cents to $5.13.

Gold stocks rose as the spot price of gold in Sydney firmed to US$942.20 per fine ounce by 1630 AEST,up US$14.45 on Wednesday's local close of US$927.75.

Lihir Gold surged 12 cents to $3.15, while Newmont Mining firmed 11 cents to $5.81 and Newcrest Mining added 55 cents to $31.82.

Retailers were mixed, with Pacific Brands up three cents, or 3.82 per cent to 81.5 cents, Woolworths down 37 cents to $26.13 and David Jones two cents lower at $3.72.

Fairfax Media gained 0.5 cents to $1.105 and said it would buy back as much as $200 million of its bonds, helping to reduce the newspaper publisher's interest expense following last week's credit rating downgrade.

Rival News Corporation dropped 38 cents to $13.50 and its non-voting scrip fell 38 cents also, to $11.70.

By 1639 AEST APN News and Media Ltd had surged 7.1 cents, or 6.19 per cent, to $1.23 after raising $83 million through a new share sale to institutional investors.

AWB surged 13.5 cents, or 14.29 per cent to $1.08, while casino operator Crown lost two cents, or 0.29 per cent, to $6.97 after Goldman Sachs JBWere retained their buy recommendation on the stock.

GPT Group was the top traded stock by volume, with 124.4 million shares changing hands for over $58.3 million and pushing the share price two cents, or 4.44 per cent, higher at 47 cents.

Preliminary national turnover reached 2.03 billion shares traded for a value of $4.3 billion, with 504 stocks up, 467 down and 322 steady.

- AAP