Australian stocks closed weaker for the third consecutive session on Friday as fears the United States will default on its debt and worries about a local interest rate rise pushed the market to near 11-month lows. Major banks ended weaker despite early gains and resource shares continued to fall but brewer Foster's went against the general trend with a 1.4 percent gain after saying it would not rule out take-over talks with suitor SABMiller.
Brokers said the US debt impasse weighed on sentiment but inflation data earlier this week, which raised the prospect of a near-term rate hike, also kept investors nervous. "There is no doubt that some traders will look back on this week and claim that the best part about it was its ending," said CMC Markets analyst Ben Le Brun. "We now have the probability of further rate rises before the year is out which will further depress the economic environment on the East Coast of Australia."
The benchmark S&P/ASX 200 index lost ground later in the session to end down 39.2 points at 4,424.6, according to the latest available data. The index fell 1.6 percent on Thursday on US debt concerns. New Zealand's benchmark NZX 50 index lost 1.16 points to end at 3395.6.
Australia's second-largest steel producer OneSteel Ltd fell 1.4 percent to A$1.77 as it said its Whyalla Blast Furnace was back to normal operating levels, with the capital cost of the work estimated at A$65 million. Foster's shares were one of the few major gainers, adding 7 cents to A$5.05 after its chief executive did not rule out take-over talks with suitor SABMiller but said the suitor's $10.4 billion offer was so low it was not worth considering.
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