MELBOURNE: Australian stocks fell 1.2 percent on Thursday as miners and energy firms sank on softer copper and oil prices, and banks recoiled in a cautious session ahead of clues to economic strength in the United States.
US consumer prices, existing home sales and regional manufacturing data will be closely watched later on Thursday as investors around the globe gauge whether the world's largest economy is headed for recession.
"Investors are cautious about the outlook for growth. The blow to international confidence in recent weeks has led analysts to downgrade earnings forecasts for the next few months and share market valuations have now recovered to levels that are attracting some selling," said Ric Spooner, analyst at CMC Markets.
New Zealand's benchmark NZX 50 lost 3.9 points to 3,286.2.
APN News & Media slumped 12 percent to a record low of A$0.78 after a large write-down, on 4 times its usual volume.
Other media stocks sank, with Fairfax down 2.4 percent and Seven West down 4.3 percent.
BHP Billiton lost 1.8 percent, while Rio Tinto shed 1.5 percent after copper prices slipped.
Energy heavyweight Woodside Petroleum fell 2.4 percent to A$36.87 as oil prices come under pressure as demand expectations are lowered on European and US economic problems.
Takeover target Foster's Group rose 0.8 percent to A$5.00 after global brewing giant SABMiller turned hostile with its $10 billion offer, which Australia's top brewer rejected for a second time.
The rise of 2 percent above the A$4.90 a share offer limits pressure on SABMiller to raise its offer and puts the spotlight on Foster's results next Tuesday.
"The deal is reasonable on 2012 consensus earnings estimates. In order to defend the bid successfully, Foster's needs to show the market its estimates are too low, thus making the multiple implied by SABMiller unreasonable," said City Index analyst Peter Esho.
AMP rose 2.7 percent to A$4.26 after topping market forecasts for its first-half profit and lifting targeted savings from its takeover of the Australian arm of France's AXA.
Coal rail transport group QR National slid 2.3 percent to A$3.45 after a newspaper reported that its top customer, BHP Billiton , is proposing to build a new rail line that could threaten QR National's business.
Coal-to-retail conglomerate Wesfarmers ended up 0.4 percent at A$30.41 after it beat analyst forecasts with a 23 percent rise in full-year earnings as its Coles supermarkets outperformed. The stock had gained as much as 3 percent in the session. Rival Woolworths fell 0.5 percent.
Copyright Reuters, 2011
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