Monday February 23, 06:11 AM
Australia shares at one-month closing low; Rio hit
By Mette Fraende
SYDNEY, Feb 23 (Reuters) - Australian stocks ended down 1.5
percent on Monday, dragged by a big loss for miner Rio Tinto (LSE: RIO.L - news) , but recovered from earlier lows on a report the U.S.
government may raise its holding in Citigroup (NYSE: C - news) .
The Wall Street Journal report that the U.S. government may
acquire up to 40 percent of Citigroup's common stock sent banking shares briefly into positive territory,
but they were mostly unable to sustain the rises.
'Everytime we seem to be getting towards what you think is
light at the end of the tunnel, everyone's saying: it's not
light, it's another train,' said Peter Wright, dealer at Burrell
& Co.
The benchmark S&P/ASX 200 index lost 51.2 points to
3,351.2, based on the latest available data, it's lowest close
since Jan. 23 and having fallen as low as 3,312.6.
New Zealand's benchmark NZX 50 index fell 1.5 percent
to 2,538.3.
Top lender National Australia Bank (Berlin: NAL.BE - news) ended 1.2 percent
lower at A$17.80 and No. 2 Westpac Banking Corp (Frankfurt: 854242 - news) . fell
0.4 percent at A$16.32. Commonwealth Bank of Australia (Munich: 882695 - news)
and Australia and New Zealand Banking Group eked out
small gains.
Bank and insurer Suncorp-Metway Ltd lost 6.0 percent
at A$4.99 while investment bank Macquarie Group fell 3.6
percent to A$19.90 after reaching an over six-year low earlier in
the day.
For more on Asian market reaction to the Citi report, see .
Rio Tinto Ltd (Munich: 855018 - news) shed 6.8 percent to A$46.87,
on weaker metals prices and doubts over its deal to sell asset
stakes and issue convertible bonds to China's Chinalco.
'There are still question marks about whether this (deal)
will go ahead...it's a combination of whether the actual sale to
Chinalco will go through, and also commodity weakness,' said
Dominic Vaughan, senior dealer at CMC Markets.
Rival miner BHP Billiton Ltd lost 3.9
percent to A$29.31.
Analysts said they now believe the Australian index is
targeting a move below the 3,000 mark.
'If we see further deterioration globally we could possibly
see it back through 3,000, probably back around 2,800...it could
happen quite soon,' Vaughan said.
Shares in oil and gas companies also slid after a fall in
crude prices at the end of last week. Roc Oil Company
fell 9.9 percent to A$0.32 and Woodside Petroleum Ltd (Berlin: WOPA.BE - news)
ended down 1.8 percent at A$32.77.
BlueScope Steel Ltd (Berlin: BH5.BE - news) , Australia's top steelmaker,
said it expects a loss in its second half due to challenging
market conditions, sending its shares down 10.9 percent to
A$2.78.
(Reporting by Mette Fraende)
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