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Reduced optimism, and the News just gets worse

THE sharemarket rebuffed positive offshore leads to finish slightly lower as losses in energy and financial stocks, and big falls in News Corporation, weighed on a benign market.

THE sharemarket rebuffed positive offshore leads to finish slightly lower as losses in energy and financial stocks, and big falls in News Corporation, weighed on a benign market.

The benchmark S&P/ASX 200 index closed down 1.5 points, or 0.03 per cent, at 4472 points, while the broader All Ordinaries Index was 2.8 points, or 0.06 per cent, weaker at 4539.9.

A benign, sentiment-driven market continued to drive light trading volumes as Australian investors' eyes stayed fixed on European and US debt struggles and domestic economic issues, Shaw Stockbroking's senior dealer Jamie Spiteri said.

"That's reduced optimism across Australia and aided the uplift in the gold price globally," he said. The spot price of gold in Sydney was $US1596.70 ($1506.69) per fine ounce by the close, up $US15.50 from Friday's local last trading price of $US1581.20.

Gold major Newcrest Mining rose 14? to $40.41, while Kingsgate Consolidated rose 38?, or 4.42 per cent, to $8.98.

Deals in the materials and energy sectors, combined with the impact on News Corporation's shares from the phone-hacking scandal at the now-defunct News of the World newspaper, dominated the market.

Shares in Rupert Murdoch's News Corporation resumed their fall, losing 61?, or 4.13 per cent, to $14.16 while News's non-voting scrip fell 56?, or 3.91 per cent, to $13.76.

"It could go lower. It's not their commercial management of the situation but their political management of the situation - that's very hard to value," Mr Spiteri said. "From a commercial aspect, the grand plans are being destroyed by [a] battle [that] won't go away in a hurry ... and [Mr Murdoch] can no longer control."

BHP Billiton's shares fell 4? to $42.85 after investors digested the miner's $US12 billion acquisition of Petrohawk Energy. Rio Tinto rose 24? to $81.60.

Woodside Petroleum's share price also weakened as the market moved to discount any potential predatory move by BHP on Woodside. Woodside fell 92?, or 2.35 per cent to $38.25.

Santos' shares fell 49?, or 3.7 per cent, to $12.74 on its scrip bid for coal seam gas explorer Eastern Star Gas in a deal worth $924 million.

The big banks were mixed, and retailers were mostly lower, although David Jones finished unchanged at $3.15.


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