Resources companies lead Aussie market down

MELBOURNE - Resources companies led the Australian share market down to a weaker close after a broad-based sell-off reversed earlier gains.

The benchmark S&P/ASX200 index closed down 32 points, or 0.68 per cent, to 4,685 points, while the broader All Ordinaries index fell 31 points, or 0.65 per cent, to 4,708.2 points.

On the Sydney Futures Exchange at 1618 AEDT, the December share price index contract was 28 points lower at 4,701 on 26,537 contracts.

ABN Amro Morgans Ipswich manager Tony Russell said that after a good start following gains overseas, the market drifted lower during the local trading day.

Mr Russell said there was likely profit-taking in the resources and banking sectors, after the market hit a four-day high on Monday.

"Probably the two sectors that have been performing well, we are seeing some profit-taking," Mr Russell said.

"The resources are certainly leading the charge down," he said.

The world's largest resources company, BHP Billiton, fell 23 cents to $40.23 and rival Rio Tinto was off $1.89 to $71.89, while Fortescue Metals Group fell 12 cents to $4.13.

Among the gold miners, Lihir fell four cents to $3.66 and Newmont Mining was off one cent to $5.74, while Newcrest rose 20 cents to $37.20.

At 1620 AEDT the spot price of gold in Sydney was US$1168.50 per fine ounce, up US$5.23 from Monday's closing price of US$1,163.27.

Energy stocks were mostly down, with Oil Search off five cents to $5.81,Santos losing 24 cents to $14.77 and Origin down 11 cents to $15.85.

Woodside Petroleum defied the market gloom to rise 39 cents to $49.10.

On Tuesday Woodside announced its output for calendar 2009 would be within its guidance range before declining in 2010 due to sale of a stake on a project.

Mr Russell said pending legislation on carbon emissions could also be weighing on investors' minds.

He said news that Lloyds Banking Group in the UK was seeking to raise billions in a capital at a discount of about 60 per cent may have spooked some local investors.

"The US$22 billion (A$23.8 billion) rights issue from Lloyds bank has set-off a few nervous nellies in the market," Mr Russell said.

Financial stocks finished the day lower, with Commonwealth Bank down six cents to $52.74 and ANZ off one cent to $21.89.

National Australia Bank fell 41 cents to $27.99, Westpac was down 19 cents to $23.96 and Macquarie Group was off 28 cents to $47.82.

Most media stocks had a poor day, with News Corp losing nine cents to $15.40 while its non-voting scrip fell 13 cents to $13.04 and rival Fairfax was off one cent to $1.65.

Consolidated media rose two cents to $3.13.

Making news, luxury leather goods retailer OrotonGroup said sales for the first 17 weeks of its fiscal year were in line with expectations.

Shares in the company rose 28 cents, or 4.52 per cent, to $6.48.

Suncorp-Metway chief Patrick Snowball told investors that the firm's underlying banking business was sound and that bad and doubtful debt charges were declining.

Suncorp shares ended the day up six cents at $8.78.

Among the retailers, Coles owner Wesfarmers fell 51 cents to $29.24 and Woolworths ended steady at $28.08.

Up-market retailer David Jones rose three cents to $5.81 snd rival Myer was off two cents to $3.86.

At 1637 AEDT the top-traded stock by volume was Monitor Energy, with 242.8 million shares worth $758,000 changing hands.

Its shares were steady at 0.3 cents.

Preliminary national turnover was 2.93 billion shares worth $5.04 billion, with 465 stocks up, 603 down and 383 unchanged.

- AAP