Australia Stocks Follow Commodities To Solid Losses

MarketWatch Pulse

Australian stocks opened solidly lower Monday, reacting to losses for key commodities and not helped by sizeable losses Friday in the U.S., including a 1.4% drop for the S&P 500 . Sydney's benchmark S&P/ASX 200 was 0.9% lower about 20 minutes into trading, with the mining sector leading the retreat. Iron-ore miners in particular suffered as Tianjin spot ore prices hit $58.20 per metric ton, Dow Jones Newswires reported, marking the lowest level since the Steel Index began publishing the prices in 2008. As a result, Arrium Ltd. fell 4.1%, Atlas Iron Ltd. lost 3%, and BC Iron Ltd. dropped 5.8%, though Fortescue Metals Group Ltd. managed to rise 0.5% as it appeared set to refinance much of its multi-billion-dollar debt load. Still, Fortescue shares are down more than 20% for the year to date. Gold miners -- stock in which is generally more volatile than for the iron-ore space -- likewise suffered, with Newcrest Mining Ltd. down 3.2%, Kingsgate Consolidated Ltd. down 5.8%, and Perseus Mining Ltd. down 8.7%. Diversified senior miners BHP Billiton Ltd. and Rio Tinto Ltd. lost 2.1% apiece. Among the utilities, Origin Energy Ltd. lost 1.2%, and AGL Energy Ltd. gave up 1%, as J.P. Morgan wrote that discounting in the industry is encouraging customers to switch providers at a greater rate. Among other movers, Macquarie Group Ltd. fell 1.9% after the Wall Street losses at the end of the previous week, while mall-developer Scentre Group dropped 3.1%, and WorleyParsons Ltd. weakened by another 2.9% after news of its removal from the S&P/ASX 50 index, announced Friday. Seek Ltd. and Medibank Private Ltd. , both of which will be joining the ASX 50, were down 0.4% each.

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