Australia Stocks Give Back Some Previous Gains

Australia stocks cooled modestly early Tuesday, with the S&P/ASX 200 down 0.2% in thin volumes on a holiday-shortened week. The index had rallied 1.5% the previous session as the key resources and financial sectors showed broad gains, but Tuesday saw a more mixed picture, with the banks and insurers higher, but most of the miners and energy names lower. Among the financial majors, Australia & New Zealand Banking Group rose 0.7%, Commonwealth Bank of Australia and National Australia Bank Ltd. each advanced 0.4% and Westpac Banking Corp. added 0.7%, while Suncorp Group Ltd. improved by 0.5%. On the other hand, energy shares followed crude-oil futures lower, taking 0.9% each from Oil Search Ltd. and Woodside Petroleum Ltd. , while Karoon Gas Australia Ltd. lost 1.2%. Among the mining names, Fortescue Metals Group Ltd. gave up 1.3%, and Atlas Iron Ltd. fell 3.3% despite a modest improvement for iron ore, though Arrium Ltd. managed to bounce 6.7%. The collapse in iron-ore spot prices as China reins in steel capacity has taken 87% of Arrium and Atlas Iron's respective stock prices so far this year, with larger rival Fortescue down 54% for 2014 to date. BHP Billiton Ltd. dropped 0.6% Tuesday morning, and Rio Tinto Ltd. lost 0.5%. Shares of Qantas Airways Ltd. retreated 0.8% despite the lower oil price and an Australian Financial Review report that the carrier had gotten its short-haul pilots to accept a pay freeze.