Australia Stocks Dragged Down Deeper By Energy, Gold

Australian stocks slid further downhill Monday morning as strength in airlines and a few of the financials proved unable to offset further heavy losses for the energy and gold shares, with the S&P/ASX 200 down 0.6% in early moves. After taking monster losses in the previous session, the energy sector received more punishment amid weakness in crude oil. Santos Ltd. fell 4.3% (after a 13% loss Friday), while Oil Search Ltd. dropped 4.5%, Karoon Gas Australia Ltd. retreated 5%, and and Woodside Petroleum Ltd. gave up 3.6%. The gold miners fared little better, as Comex gold futures fell to near the $1,150-an-ounce mark. Perseus Mining Ltd. traded 6.8% lower, Kingsgate Consolidated Ltd. tumbled 7.1%, and Newcrest Mining Ltd. pulled back by 4.6%, while among the diversified senior miners, BHP Billiton Ltd. slid 1.4%, and Rio Tinto Ltd. dropped 0.9%. On the upside, the airlines rallied on the sell-off in energy futures, as Virgin Australia Holdings Ltd. rose 2.9%, and Qantas Airways Ltd. surged 7.6%, even as Germany's state rail operator accused it and 12 other airlines of colluding on cargo prices. Among the financials, Macquarie Group Ltd. added 0.6% as German utility E.ON SE confirmed it would sell its Spanish and Portuguese assets to the Australian group. Suncorp Group Ltd. rose 0.3%, but the big banks gave up their early advance to trade lower, with Commonwealth Bank of Australia down 0.4%, and National Australia Bank Ltd. off 0.6%. The weakness in Australian stocks also came ahead of Chinese manufacturing data, due out later in the day with the potential to move shares, given China's role as Australia's top trading partner.

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