Australian stocks snapped a four-day winning streak, dropping 0.9 percent on Monday, with miners losing ground as demand worries hurt commodity prices. Arrow Energy fell 3.6 percent to A$5.1, its sharpest daily fall in a month, after it said it had agreed to a fresh bid from Royal Dutch Shell and PetroChina. The offer was raised by six percent to A$3.4 billion ($3.1 billion) for Arrow's Australian assets.
Analysts had expected the final offer to touch at least A$5 a share compared to the revised offer of A$4.70. The benchmark S&P/ASX 200 index weakened 42.03 points to 4,830.20, according to latest available data. "Resources have been the best performing sector over the last month. With softer commodity prices, investors are taking some profits," said Chris Kimber, a client adviser at Bell Potter Securities.
"I don't see commodity prices staying soft for long though." Traders said sentiment was unsettled after Asian stocks fell and on renewed concerns over Greece's debt problems ahead of a euro zone summit. There were also worries over India's move to raise rates last week.
BHP Billiton fell 1.4 percent and Rio Tinto dropped 1.52 percent after commodity prices fell. Investors expected more Asian central banks to follow India in raising rates to tame inflation. A major risk for industrial metals is the extent and timing of fiscal tightening in China, the world's largest consumer of industrial metals.
Top banks fell on concerns lingering global economic woes would add to their cost of funds. Top lender National Australia Bank, which said it was in advanced talks with AXA SA and AXA Asia Pacific for a $12 billion take-over plan, slipped 0.7 percent to A$26.71.
Commonwealth Bank of Australia, Westpac Banking Corp and Australia New Zealand Banking Group all shed between 0.8 and 1.6 percent. AXA Asia Pacific climbed 0.2 percent after it said that take-over talks with NAB and its parent were in advanced stages.
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