Australian stocks: Record oil price dents stocks

SYDNEY - The Australian sharemarket ended the day lower, depressed by news that oil prices had reached another record high of nearly US$60 a barrel.

Investors are worried that higher oil prices will inevitably lead to higher petrol prices and hurt the hip pocket of consumers.

However the record oil price provided a strong boost to local oil stocks, which helped the sharemarket touch new record highs before falling back in afternoon trading.

At the close, the benchmark S&P/ASX200 was 6.6 points lower at 4305.6.

Earlier the index reached a new day high of 4321.7, ahead of the previous record set last Friday of 4312.2

EL&C Baillieu Stockbroking director Richard Morrow said the market fell after oil prices reached a new high in Singapore trading yesterday.

Light sweet crude reached US$59.01 a barrel, up 54 cents from its previous all-time closing high, reached in US trading on Friday night.

Morrow said the market was nervous about the impact on consumer confidence.

"The concern is that a higher oil price might trigger a weaker market," he said. "First it will start to eat into consumer confidence."

Treasurer Peter Costello also commented on the oil price yesterday, saying it could knock economic growth in Australia.

However oil stocks reaped the benefit of the higher oil price, with Woodside Petroleum gaining A$1.15, or more than 4 per cent, to A$29.40.

Santos rallied more than 6 per cent, closing 66Ac higher at A$11.52, and Oil Search jumped 11Ac to A$2.91.

Mining giant BHP Billiton edged 2Ac lower to A$18.23 as it moves to compulsorily acquire the rest of WMC Resources now that it has reached more than 90 per cent ownership of its shares.

Rio Tinto fell 29Ac to A$45.16.

In other news, shares in media group Publishing & Broadcasting shifted 26Ac higher to A$15.83 after forming a deal over its content with Australia's number two telco Optus.

News Corp slipped 43Ac to A$22.84 and its non-voting shares gained 19Ac to A$21.79.

The big banks were lower, with National Australia Bank falling 50Ac to A$30.70, the Commonwealth Bank dipping 22Ac to A$37.61, Westpac losing 21Ac to A$19.76 and the ANZ weakening by 19Ac to A$21.91.

Among the other big financials, Macquarie Bank backpedalled A$1.02 to A$57.68, AXA Asia lost 11Ac to A$4.61 but AMP was steady at A$6.78.

Shares in Qantas Airways descended 4Ac to A$3.32 as Singapore Airlines indicated it was not interested in a merger between the two carriers.

Among other blue chip stocks, Telstra lost 6Ac to A$5.08.

- AAP