Australian stocks took a turn for the worse Monday morning, as the S&P/ASX 200 pulled back by 1.2% with resource shares leading the way down. Stock in BHP Billiton Ltd. fell 2.5%, with RBC Capital Markets cutting its rating on the shares to underperform from sector-perform and questioning the wisdom behind BHP's spin-off of some of its assets. Weak Chinese economic data out late last week helped drag on the iron-ore price, and J.P. Morgan cut its 2015 price forecast for the mineral by 24%. Among the iron plays, Arrium Ltd. lost 5%, Fortescue Metals Group Ltd. gave up 1.5%, Mt. Gibson Iron Ltd. tumbled 9%, and BC Iron Ltd. was 5.5% lower as UBS slashed its price target on the name by 73%, according to Dow Jones Newswires. Meanwhile, gold miner Evolution Mining Ltd. was 5.2% weaker after announcing additional price hedges and a refinancing of some of its debt. Among the few gainers early Monday, Telstra Corp. added 0.8% after signing a revised deal for its contract for Australia's National Broadband Network project. And stock in data-storage company Recall Holdings Ltd. was untraded after Recall rejected a roughly $1.8 billion takeover bid from Iron Mountain Inc. , stock in which was down 1.9%. The moves came ahead of a government budget briefing expected to announce a rising deficit and spending cuts.
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