Australian share prices dropped 0.6 percent on Monday as investors opted to sit on the sidelines ahead of the United States Federal Reserve's decision on interest rates, dealers said. The benchmark S&P/ASX 200 lost 35.4 points to close at 6,271.4 while the broader All Ordinaries index fell 32.0 points to 6,283.7.
Turnover was 1.50 billion shares worth 5.06 billion dollars (4.3 billion US) with losses beating winners 671 to 506 and 328 stocks closing unchanged. Markets around the world are awaiting Tuesday's decision from the Federal Reserve which is expected to see the bank's funds target rate cut by at least 25 basis points to help stabilise credit markets.
Dealers said while some stocks managed to attract buying interest, such as oil and gas producer Oil Search, most investors were awaiting the outcome of the Federal Reserve meeting. "Overall, the market behaved as expected but there were some solid performances by individual stocks," Austock Securities private client advisor Michael Heffernan said.
"I think there was a little bit of profit-taking ahead of the Fed meeting - we're probably looking at a 25 (basis) points cut even though some want more than that." Heffernan said Oil Search made gains on speculation that China National Petroleum Corp was considering bidding up to 5.0 billion US dollars for the company. Oil Search closed up 45 cents at 4.30 dollars.
The big mining stocks, however, were weighing on the market. BHP Billiton dropped 58 cents to 38.82 dollars while Rio Tinto shed 1.24 dollars to close at 98.15 dollars. The major banks were also down; National Australia Bank dropped 58 cents to 38.42 dollars, Commonwealth Bank fell 32 cents to 55.38 dollars, ANZ was off 26 cents to 28.45 dollars and Westpac lost seven cents to 27.08 dollars.
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