(Adds details, comments)
SYDNEY, May 21 (Reuters) - Australian shares fell 0.8 percent
on Wednesday as worries that slowing consumer spending in the
U.S. may hurt demand for commodities weighed down on the miners,
while fresh credit worries pressured financial firms.
Insurance Australia Group <IAG.AX> dropped after QBE
Insurance Ltd <QBE.AX> scrapped its A$8.7 billion ($8.4 billion)
bid proposal for IAG after the latter rejected it as too low
[ID:nSYD109742].
But coal producer Macarthur Coal Ltd <MCC.AX> jumped over 14
percent to a record after it said the world's top steel maker,
ArcelorMittal <ISPA.AS>, had entered talks with Macarthur on a
possible transaction [ID:nSYD84982].
Denting sentiment in the financial sector, an influential
banking analyst slashed her earnings outlook for top U.S. banks
and said the credit crisis will result in three years of
multi-billion dollar revenue declines for banks [ID:nBNG86237].
Market watchers said the market was probably due a pullback
after rising about 16 percent over the past two months, and
growing worries about inflation and renewed credit concerns have
prompted investors to lock in recent gains.
"People have been sweeping them (credit worries) under the
rug a bit recently. Some people have said that the end is in
sight but it's still going to pop up here and there," said Eric
Betts, equities strategist at Nomura Australia.
"And if we get news about some major financial institution
that is having problems raising credit, then panic sets in
again."
The benchmark S&P/ASX 200 index <.AXJO> fell 45.6 points to
5,826.5 by 0104 GMT, adding to a 0.7 percent decline in the
previous session.
New Zealand's benchmark NZX-50 index <.NZ50> fell 0.7
percent, or 25.24 points, to 3,621.95. Top stock Telecom Corp Ltd
<TEL.NZ> was unchanged at NZ$3.95.
STOCKS ON THE MOVE
* IAG fell 7.1 percent to A$3.93 after QBE dropped its final
bid proposal for IAG.
QBE shares were unchanged at A$25.67.
"QBE can buy something around the world, and they have in the
past in the U.S. and the UK. So probably, IAG needs QBE more than
QBE needs IAG," said Nomura's Betts.
0101 GMT
* Banking shares fell after the bleak comments from Meredith
Whitney, banking analyst at Oppenheimer & Co dented optimism that
financial institutions were on the road to recovery.
Australia and New Zealand Banking Group Ltd <ANZ.AX> fell 1.1
percent to A$21.86 while Westpac Banking Corp <WBC.AX> lost 1.2
percent to A$23.86.
National Australia Bank Ltd <NAB.AX> eased 0.3 percent to
A$33.66 and Commonwealth Bank of Australia Ltd <CBA.AX> shed 0.9
percent to A$43.41.
0059 GMT
* Resource firms shrugged off record oil prices <CLc1> and
stronger gold prices <XAU=> to fall on worries that weakening
consumer spending in the world's biggest economy may have an
adverse impact on global demand for commodities.
BHP Billiton Ltd <BHP.AX>, the world's top miner and
Australia's top oil and gas producer, fell 3.3 percent to
A$47.00, while its main rival and takeover target, Rio Tinto Ltd
<RIO.AX>, lost 3.5 percent to A$149.62.
0057 GMT
* Coal producer Macarthur Coal Ltd <MCC.AX> rose as much as
14.1 percent to a record A$20.98 after it said it was in talks
with ArcelorMittal and an unnamed party on a possible
transaction, which could possibly trigger a bidding war for
Macarthur.
Shares in other coal producers also rose on hopes of more
deals in the sector, with Centennial Coal <CEY.AX> rising 2.4
percent to A$4.68 and Felix Resources <FLX.AX> gaining 5.7
percent to A$18.81.
0056 GMT
* Energy firms rose after oil prices <CLc1> scaled a new peak
near $130 a barrel on Tuesday amid deepening supply worries.
Woodside Petroleum Ltd <WPL.AX>, Australia's top independent
oil and gas company, rose 0.4 percent to A$68.09, Santos Ltd
<STO.AX> rose 1.9 percent to A$19.90 and Roc Oil Co. Ltd <ROC.AX>
added 2.4 percent to A$2.56.
0049 GMT
* AWB Ltd <AWB.AX>, Australia's largest wheat exporter, rose
1.5 percent to A$3.43 after it reported an 89 percent rise in
half-year net profit after good results from its Landmark rural
services division [ID:nSYU004393].
0047 GMT
($1=A$1.04)
(Reporting by Geraldine Chua)
(([email protected]; +61 2 9373 1818; Reuters
Messaging: [email protected]))
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