Australian shares hit three-week low

Australian shares hit a three-week trough on Tuesday as tumbling oil and base metals prices dragged resource stocks sharply lower. The S&P/ASX 200 index closed down 47.1 points or 0.9 percent at 5,108.6, its lowest since November 17. The benchmark is down 5.6 percent this year.
New Zealand's benchmark NZX 50 index fell 29.4 points or 0.5 percent to finish the session at 6,035.0. Overnight, oil prices skidded to their lowest level in seven years after a meeting of members of the Organisation of the Petroleum Exporting Countries ended in disagreement over production cuts and without a reference to its output ceiling.
Meanwhile iron ore, Australia's biggest export earner, continued trading around the multi-year lows which have put pressure on the industry throughout 2015 amid expecations Chinese demand will shrink next year. "The oil prices and energy stocks have developed their own bit of momentum and it's difficult to know where it's going to stop," said Angus Nicholson, a market analyst at IG Markets.
"There's nothing stopping the huge supply of oil coming into the market." Oil Search led energy stocks lower, down 16 percent, after rival Woodside Petroleum said it cancelled take-over talks. Woodside fell 4 percent. Santos slumped 14 percent, hitting its lowest since 2000, as investors revalued the stock before a batch of new shares issued in a capital raising begin trading on Friday.
Among the beneficiaries of the lower oil price, Qantas Airways rose 5 percent thanks to cheaper fuel, while road owner Transurban added 1 percent. Broader resources also fell, in line with the prices of iron ore and other base metals. BHP Billiton was down 4.6 percent and rival Rio Tinto shed 3.4 percent, while BHP spin-off South32 dipped 6.3 percent. Banks fared better. Westpac Banking Corp and Australia and New Zealand Banking Group were 1 percent weaker, while Commonwealth Bank of Australia and National Australia Bank declined about 0.5 percent. Air New Zealand rose 0.72 percent after signing a memorandum of understanding with Argentina's tourism body last week.