MELBOURNE: Australian stocks fell 0.8 percent on Thursday to a 3-week low, knocked by violence in Libya, expected costs associated with a devastating earthquake in New Zealand and downbeat profit guidance from Origin Energy and Fairfax Media.
Investors dumped airline shares as oil prices hit $100 for the first time since October 2008, sending Qantas Airways down 3.3 percent and Virgin Blue 4 percent as fuel costs are expected to escalate.
The underlying S&P/ASX 200 index lost 36.6 points to 4,809.3, according to the latest data, its lowest close since Feb. 2.
Investors said the local market had held up relatively well and suggested the falls may present buying opportunities.
"The local market has looked well supported today around the 4,800 level, with the market bouncing well off this level, a positive sign that investors may be using any dips or weakness as an entry opportunity with volumes also reasonably healthy," said Matt Lewis, trader at CMC Markets.
Justin Gallagher, head of sales trading at RBS Australia, noted Dow Jones futures were up 14 points and said markets may recover quickly.
"That suggests the market has already priced in the concerns around what this means for the markets. We'll probably see interest come into share prices at these levels and push higher. Overall, investors are generally pretty comfortable," he said.
New Zealand's benchmark NZX 50 index fell 0.1 percent to 3,368.4.
Miners lost ground as copper prices sagged on concern the higher oil price may stall economic recovery and inhibit demand for Australian mineral exports.
BHP Billiton fell 1.3 percent while Rio Tinto slipped 0.8 percent.
Origin slumped 3.5 percent to its lowest level in around 3 months after it trimmed its earnings guidance, while Fairfax shed 5.3 percent, touching a 7-month low, after it said second-half sales may fall.
Pacific Brands slumped 11 percent to A$0.98 after half-year sales fell 9.5 percent and it said soft trading conditions and higher cotton prices would see underlying earnings fall in the second half.
Transpacific was another big loser, falling 7.4 percent to A$1.25 after it reported a flat first-half net profit and said margins would remain below historic levels. It declared no dividend.
Logistics firm Toll Group ended down 3.2 percent at A$6 after it warned slow growth in Australia's manufacturing and retail sectors was likely to affect its domestic business.
"Earnings results have been very mixed, and understandably so. Consumers haven't been spending, forcing businesses to slash prices and margins, and ultimately depressing earnings," said Craig James, Chief Economist at Commonwealth Securities.
"In aggregate, though, profits by ASX 200 companies rose by around 40 percent over the past year, so it is clear that corporate Australia is in fundamentally strong shape," he said.
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