Eyes turn to China after debt setback in Europe
STOCKS fell more than 1 per cent from their highest close so far this year after Standard & Poor's stripped France and Austria of their top-notch triple-A status and also cut the ratings of seven other debt-laden European countries.
STOCKS fell more than 1 per cent from their highest close so far this year after Standard & Poor's stripped France and Austria of their top-notch triple-A status and also cut the ratings of seven other debt-laden European countries.Miners and financials led the 1 per cent slump from Friday's close in the local market as investors dived for cover into more defensive telecom stocks ahead of a debt sale by newly downgraded France and talks on restructuring Greece's debt this week."If we had a Greek default there would be an initial bad reaction but, I think, there are probably a lot of people who have factored in an event like that," Burrell Stockbroking adviser Jamie Elgar said.At the close yesterday, the benchmark S&P/ASX200 index was down 48.7 points, or 1.16 per cent, at 4147.2, while the broader All Ordinaries index was down 46.5 points, or 1.09 per cent, at 4208.9.On the ASX 24, the March 2012 share price index futures contract was down 58 points at 4122, with 25,804 contracts traded.Miners dropped 1.6 per cent after metals prices fell amid a growing aversion by investors to holding riskier assets. BHP Billiton shed 1.6 per cent, or 62?, to $36.01, while Rio Tinto dropped 0.5 per cent, or 32?, to $64.89.The spot price of gold closed at $US1638.65 a fine ounce, down more than $US6 from Friday's local close of $US1644.98.Fortescue Metals shed 2.7 per cent, or 13?, to $4.62, as it resumed operations at two of its Pilbara operations that were closed because of tropical cyclone Heidi last week.Commodities and resources could come under further pressure this week if China's gross domestic product figures, due today, come in below the 8.7 per cent growth expected by analysts."China GDP numbers ... will take centre stage, as the world waits to see how the fastest growing economy is travelling," IG Markets market strategist Stan Shamu said.Financial stocks were down 1.2 per cent as dealers worried the euro zone debt crisis could put further pressure on banks' lending costs.The big four banks finished 1.1 per cent to 1.6 per cent lower as investors fretted about a spate of bond issuances in Europe this week, starting with France on Monday and Greece and Spain's treasury bill sales tonight."As an investor these are high-yield stocks but they're facing headwinds," Fidelity's head of Australian equities, Paul Taylor, said.One of the few stocks bucking the market trend was Dart Energy. Its shares ended up 9.2 per cent at 47? after it announced it had created a subsidiary, Dart Energy International Shale, to develop its growing European shale gas resources.