Australia Stocks Follow Wall Street Down Sharply; Banks Weak

Australia stocks retreated sharply out of the open Thursday, with investors apparently spooked by a Wall Street sell-off overnight. The S&P/ASX 200 was down 1.1% at 5,908.20 about 20 minutes into trading, after failing to break through the closely watched 6,000 level during the past couple of sessions. The pullback followed losses in New York, where the S&P 500 dropped 1.5%, helping prompt a solid decline in Sydney's big-bank shares after recent gains. Heavily weighted Commonwealth Bank of Australia , National Australia Bank Ltd. and Westpac Banking Corp. all lost 1.1% apiece, while Australia & New Zealand Banking Group gave up 1.2%, and investment bank Macquarie Group Ltd. surrendered 1.4%. Regional lender Bank of Queensland Ltd. traded 2% lower after reporting a 19% rise in first-half cash earnings that was nonetheless slightly below a consensus forecast reported by The Wall Street Journal. Mining stocks were mixed, meanwhile, with BHP Billiton Ltd. down 1.1%, Rio Tinto Ltd. up 0.4%, Fortescue Metals Group Ltd. up 0.5%, Oz Minerals Ltd. down 1.5%, and Newcrest Mining Ltd. off 0.7%. Fortescue Metals was also in the news as the Australian Competition and Consumer Commission expressed concern over remarks a day earlier by Fortescue Chairman Andrew "Twiggy" Forrest calling for iron miners to collectively cut output, something the ACCC said would amount to price-fixing, Dow Jones Newswires reported. Among other movers Thursday, Stockland fell 2.6%, Incitec Pivot Ltd. dropped 2.9%, and BlueScope Steel Ltd. weakened by 3.7% after UBS cut its shares to neutral from buy, while reducing its price target by 18%. Stock in retail major Myer Holdings Ltd. plunged 5% as the shares went ex-dividend.