November 8, 2012 / 6:52 AM / 5 years ago

Australia shares fall 0.7 pct, break winning run

MELBOURNE, Nov 8 (Reuters) - Australian shares snapped a
four-day winning streak on Thursday, falling 0.7 percent as
commodity prices and stocks offshore lost ground, although the
market pared steeper losses after local employment figures
topped expectations. 
    A steady jobless rate of 5.4 percent was modestly
encouraging and boosted the local dollar.       
    "The Australian market has reversed part of its heavy losses
on the back of a better-than-expected unemployment number and a
turnaround in U.S. futures. Investors bailed out of mining and
energy plays today, preferring safer plays like healthcare and
staples," said Ben Taylor, trader at CMC Markets.
    The benchmark S&P/ASX 200 index fell 32.7 points to
4,483.8, according to the latest data, off a session low of
4,459.9. It rose 0.7 percent to 4,516.5 on Wednesday to hit a
one-week closing high. 
    New Zealand's benchmark NZX 50 index rose 0.3
percent to 3,955.25.
    U.S. stock futures were up 0.4 percent, pointing to a
recovery when Wall Street opens after all major U.S. stock
indexes slumped over 2 percent overnight.   
    The Australian market started out lower in a broad-based
drop, spearheaded by losses in top miners, energy firms, banks
and telecom Telstra Corp.
    Following U.S. President Barack Obama's re-election,
investor attention has turned to the looming U.S. "fiscal cliff"
debate and Europe's economic troubles. Copper dropped to a
two-month low and Brent crude fell nearly 4 percent.
    "Investors want answers on how the two parties can work
together amid the upcoming fiscal cliff to avert a recession.
The flight into U.S. bonds (on Tuesday) showed the expectation
of a long period of quantative easing and increased fear of
recession," said Taylor.
    Top miner BHP Billiton fell 0.9 percent to while
Rio Tinto sank 1.1 percent.
    ANZ Banking Group sank 4.5 percent to A$24.37 as it
traded ex-dividend.
    "Our equities market now will be in a bit of a risk-off
phase. I'd be expecting the market to pull back a bit. Our
batting order at this stage is defensives, resources, banks,"
said Credit Suisse equity strategist Damien Boey, saying those
sectors represented about a third each of the local market.
    One bright spot was rare earths miner Lynas, which 
rallied 12 percent to A$0.805 after a stay against its licence
to operate a plant in Malaysia, which is opposed by locals, was
lifted.
    And Linc Energy, a company that has produced diesel
and jet fuel from gas released from underground coal, rose 7
percent to A$0.635 on reports it may attract investment from
Russian billionaire Roman Abramovich.

 (Reporting by Miranda Maxwell; Editing by Richard Pullin)

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