Australian shares fell 1.3 percent to 13-month lows on Thursday, reversing early gains, as bank shares continued to fall on investor worries about Europe's ability to sustain debt obligations. After the close of local trade, world no.3 miner Rio Tinto reported a 35 percent jump in first-half profit on Thursday, but it missed market expectations and sweetened the result with a $2 billion expansion of its existing share buyback programme.
"It seems a fairly good result in line with expectations. They are fairly optimistic on 2012 although they did mention issues of European debt so there is some caution, and costs have been impacted quite severely," said Peter Chilton, investment analyst at Constellation Capital Management. The Australian-listed Rio shares fell 1.3 percent to A$76.58 before the announcement.
The benchmark S&P/ASX 200 index, which fell 2.3 percent on Wednesday, ended down 56.3 points at 4,276.5, according to the latest data, the third straight day of losses. New Zealand's benchmark NZX 50 index rose 0.2 percent to 3,377.8. Top banks fell, led by a 2.3 percent decline in National Australia Bank to A$22.67, the weakest close in 2 years.
"I'm very surprised by the extent of the weakness in the banks. The buyers are on strike and the short sellers are winning. The banks here are in a far better position that their global peers but given the market sentiment and given there's not a lot of money coming into the market the short sellers are winning the battle," said Paul Xiradis, CEO of fund manager Ausbil Dexia. Australian fast-food group Collins Foods made a weak debut, falling 8 percent to A$2.30.
Comments
Comments are closed for this article.