Australian stocks: Market closes down

MELBOURNE - The Australian share market was pulled back on Monday by the lift of a ban on covered short selling of financial stocks and news of a North Korean underground atomic weapons test.

On the positive side, higher prices for base metals and oil boosted some stocks in the resources sector.

At the 1615 AEST close, the benchmark S&P/ASX200 index had fallen 23.7 points, or 0.63 per cent, to 3,737.9, while the broader All Ordinaries index lost 20.1 points, or 0.54 per cent, to 3,735.3.

On the Sydney Futures Exchange, the June share price index futures contract was off 33 points at 3,742 on a volume of 22,905 contracts, according to preliminary calculations.

IG Markets institutional dealer Chris Weston said the financial sector was the biggest drag on the local bourse on Monday.

"I certainly don't think that Westpac would be down 3.6 per cent today if the short sell ban was still on," Mr Weston said.

"It's a short-term impact ... People are factoring in the premise of being able to short sell."

Mr Weston said trading volumes were fairly low as investors waited for US markets to resume trading and for the release of key US economic data later this week.

The local market will have no lead for trading on Tuesday, with a bank holiday in the UK and Memorial Day in the US overnight.

The North Korean nuclear test had also unsettled investors, especially on Asian markets.

"Political unrest is never good for the markets ... the market always reacts negatively to it immediately, but you usually find it comes back up again," Mr Weston said.

Among the major banks, National Australia Bank dumped 61 cents to $21.15, Commonwealth Bank reversed 71 cents to $34.80, ANZ sagged 21 cents to $15.20, and Westpac slumped 70 cents to $18.68."

In the resources sector, global miner BHP Billiton lifted 41 cents to $33.87.

But rival Rio Tinto retreated 36 cents to $64.08 after the company moved took its borates business off the market.

Oil and gas producer Woodside Petroleum was nine cents richer at $42.50, and Santos climbed 11 cents to $14.29.

On Wall Street on Friday, the Dow Jones Industrial Average index dropped 14.81 points, or 0.18 per cent, to 8,277.32.

In the gold sector, Lihir slipped two cents to $3.18, Newmont firmed four cents to $5.93, and Newcrest descended 56 cents to $31.39.

The price of gold at 1624 AEST was US$955.75 per fine ounce, up US$3.60 on Friday's close of US$952.15.

Telco Telstra scraped off one cents at $3.08, and Optus-owner Singapore Telecommunications nudged up one cent to $2.48.

Retailer Woolworths was 11 cents poorer at $25.72. Wesfarmers, which owns Coles, surrendered 56 cents to $20.25.

In the media sector, News Corp was 38 cents heavier at $13.21, while its non-voting scrip rose 36 cents to $11.60.

Consolidated Media was three cents lighter at $2.29, and Fairfax eased 0.5 cents to $1.05.

Among other stocks, vaccines and blood products developer CSL was 54 cents lower as it said US regulators may oppose its proposed US$3.1 billion acquisition of global plasma therapeutics firm Talecris Biotherapeutics Inc.

Property developer GPT Group was steady at 49 cents after it maintained its guidance for calendar 2009 despite real estate asset values remaining under downward pressure.

Steel-maker BlueScope Steel added four cents to $2.12 as it said a fire at its Western Port plant near Melbourne would cost it up to $25 million.

Home, hardware and industrial products distributor Hills Industries was off one cent at $1.63 after it said it would book net charges of between $10 million and $12 million in its full year results following a restructure and warned it may not pay a final dividend.

The top-traded stock by volume was fuel cell technology developer Ceramic Fuel Cells, with 86.48 million shares worth $20.65 million changing hands. Ceramic was six cents higher at 25 cents.

Preliminary national turnover was 1.56 billion shares worth $3.42 billion, with 511 stocks down, 474 up and 316 unchanged.

- AAP