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Aust stocks close lower as resource stocks weigh on market

07 Nov 2008 5:58 PM
By David McIntyre

SYDNEY, Nov 7 AAP - The Australian share market fell for a second day, led by resource stocks, after commodity prices and global equities slumped on fears of a deep worldwide recession.

The benchmark S&PASX200 index declined 98.4 points, or 2.37 per cent, to 4,051.3 while the broader All Ordinaries fell 99.9 points, or 2.43 per cent,to 4006.6.

On the Sydney Futures Exchange, the December share price index futures contract closed 91 points lower at 4,124 on a volume of 40,386 contracts.

Macquarie Equities adviser Helen Spencer said miners and energy producers, including Woodside Petroleum, led the market lower.

"Resources were down overnight and that was a heavy weight on the resource stocks," she said.

Oil prices tumbled overnight, with light sweet crude for December fallingUS4.53 toUS60.77 a barrel in New York.

Among the energy producers, Woodside slipped2.87, or 6.73 per cent, to $39.80, Santos declined 46 cents to13.81 and Oil Search lost 24 cents to $4.60.

Beach Petroleum gained one cent to1.025 after the oil and gas producer got approval from the Egyptian government to acquire interests in two oil discoveries in the Gulf of Suez.

The big miners also fell, Rio Tinto tumbling6.77, or 8.57 per cent, to $72.27 and rival BHP Billiton slumping1.27, or 4.35 per cent, to $27.93.

Although the ASX 200 index fell on the day, it rose from an intraday low of3963.8.

Ms Spencer said the market was not "too bad" considering what happened in the US overnight where US stocks were hammered on fears of a deep worldwide recession.

The Dow Jones industrials plunged 442 points or 4.84 per cent.

Locally stocks such as Telstra, QBE Insurance and Perpetual gained, helpinglimit losses in the market as a whole.

"Defensive earnings are being favoured by investors, as with Telstra," Ms Spenser said.

Telstra, the day's most traded stock by volume, with 36.9 million shares worth158 million changing hands, gained nine cents to $4.30.

QBE increased 75 cents, or 2.76 per cent, to27.90 and Perpetual added 69 cents to36.20.

National Australia Bank slumped2.55 or 10.32 per cent to $22.15 after paying its dividend today.

The bank said it had appointed receivers and managers to Rubicon Holdings following a request from the directors.

Commonwealth Bank, which today said it had lent ABC Learning240 million in senior debt, gained 27 cents to40.07.

ANZ lost 66 cents, or 3.89 per cent, to16.29, while Westpac was steady at21.00.

Spot gold closed in Sydney atUS735.05 an ounce, down $US3.70 on yesterday's local close ofUS738.75.

Newcrest Mining increased 29 cents to21.69 and Lihir Gold added five cents to2.07.

In other company news, Macmahon Holdings plunged 26 per cent after cutting annual earnings guidance because the slowing global economy will delay projects. The stock dropped 24 cents to 70 cents.

PMP fell five cents, or 4.67 per cent, to1.02 after the printing and media services company said its earnings in fiscal 2009 would be lower than theprevious year.

Ansell said its start to the new financial year was satisfactory and the rubber gloves and condom maker reaffirmed its annual earnings guidance. Ansell gained 19 cents to13.20.

Market turnover was 1.11 billion shares, valued at3.87 billion, with 308 stocks up, 652 down and 278 unchanged.

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