Australian shares fell 0.7 percent on Monday on a broad based sell-off sparked by lower commodities prices and renewed concerns about China's equity markets. The S&P/ASX 200 index lost 36.1 points to 5,166.5 at the close of trade. The benchmark fell 0.2 percent on Friday and is on track to end the month 1.4 percent lower. New Zealand's benchmark NZX 50 index was flat, off 0.01 percent or 0.9 points, to finish the session at 6,100.15.
Gold, oil and most base metals faced downward pressure on Friday night which was felt in the Australian materials sector on Monday. "US dollar strength means the commodities sell-off that we saw last night is what is impacting our market today, because we are so commodities heavy. Players like BHP are down 2 percent and Rio Tinto is not far behind" said Chris Conway, head of research and trading, Australian Stock Report.
"The theme that everyone seems to be playing at the moment is US dollar strength leading into the Federal Reserve decision on December 15/16." Top miner BHP Billion fell as much as 2.7 percent facing rising bills from a dam disaster in Brazil. Rio Tinto fell 1.64 percent while Newcrest Mining and Fortescue Mining fell 3.0 percent and 2.18 percent respectively.
The major banks edged up slightly with Westpac Bank up 0.6 percent and National Australia Bank and Commonwealth Bank both gaining 0.1 percent each. Some healthcare shares were in the black with CSL Ltd up 0.35 percent while Ansell rose 1.07 percent. Technology provider 3D Medical Ltd rose as much as 3 percent after announcing a reseller agreement. New Zealand's benchmark NZX 50 index edged up 0.21 percent or 12.700 points to a record high of 6,113.840.
Fisher and Paykel Healthcare led gains, up 2.58 percent as the medical device maker continued to rise after announcing record half-year results on Friday. Air New Zealand rose 1.26 percent while financial organisation Heartland NZ (HNZ.NZ) rose 1.53 percent and Sky TV rose 0.86 percent. Accounting software company Xero was down 2.49 percent, headed for its fourth consecutive session of losses after directors sold shares in the company the previous week. Shares in Fonterra's fund, which provides investor exposure to the farmer-owned dairy exporter, rose 0.55 percent as Fonterra announced it was entering a manufacturing arrangement with infant food distributor Bellamy's Australia Ltd.