(RTTNews) - The Australian stock market closed lower on Monday, ending a two-day winning streak, despite modest gains posted by Wall Street on Friday. Banks and miners fell as investors locked in profits from recent gains. Investors were also cautious ahead of the Reserve Bank of Australia’s interest rate decision on Tuesday. The benchmark S&P/ASX 200 index closed down 61.3 points or 1.6% at 3,681.2 and the broader All Ordinaries index shed 53.7 points or 1.5% to 3,619.0.

In currency trading, the Australian dollar closed weaker ahead of the interest rate decision by the Australian central bank. Economists forecast that the central bank would cut the interest rate by between 100 and 125 basis points.The Aussie finished the domestic session at US$0.6465-0.6470, down from Friday’s close of US$0.6561-0.6565.

U.S. stocks closed higher for a fifth day on Friday. The Dow Jones industrial average rose 102.4 points or 1.2% to 8,829.0, the S&P 500 index advanced 8.6 points or 1.0% to 896.2, and the Nasdaq composite index climbed 3.5 points or 0.2% to 1,535.6.

Oil prices fell on Monday in Asian trading after the OPEC decided to delay a third supply cut to its next meeting later in December. At 1:07 a.m. ET, oil was quoted at $53.33 a barrel, down $1.10 form Friday’s close of $54.43 a barrel.

On the economic front, activity in Australia’s manufacturing sector fell sharply in November, according to the latest report from the Australian Industry Group and PriceWaterhouseCoopers. The group’s Performance of Manufacturing Index for November fell 7.7 points to a seasonally adjusted reading of 32.7.

Meanwhile, a private sector measure of inflation in Australia recorded a drop of 0.6% in November. The TD Securities/Melbourne Institute inflation gauge showed that inflation for the full year dropped 0.9% to 3.0%, the lowest reading since September 2007. The on-month inflation reading registered a 0.2% drop in October.

In the resources sector, Rio Tinto sank 8.4% and BHP Billiton shed 3.6%. Fortescue Metals Group soared 21.4% on speculation that BHP Billiton might make a takeover bid after abandoning its merger with Rio Tinto last week.

Banks finished lower. Westpac plunged 5.3% after St George Bank shares were transferred to Westpac as the final implementation in its A$15 billion takeover. Commonwealth Bank lost 3.2%, National Australia Bank fell 2.9% and ANZ Banking Group shed 2.8%. Among gold miners, Lihir Gold jumped 3.6% and Newcrest Mining surged 5.3%. The energy sector was mixed, with Woodside Petroleum adding 0.4% and Santos plummeting 4.7%.

Insurers were mixed, with QBE gaining 0.8% and Insurance Australia Group losing 1.1% after the company said that it will offload 30% of its life insurance asset in Malaysia to U.K. insurer Friends Provident for A$71.72 million.

Retailers were also mixed, with David Jones rising 2.8%, Woolworths gaining 1.9%, and Wesfarmers advancing 1.8%.

Transfield Services was the worst performer, plunging 64.4%, after it completed an A$204 million institutional placement and entitlement offer that was priced at A$1.25 a share.

Brambles slumped 7.6% after ABN Amro downgraded the pallets distributor to “Hold” from last week’s “Buy”.

Property developer Leighton Holdings sank 7.3% after it announced the suspension of construction of the A$1.2 billion Trump Tower project in Dubai amid weakening market conditions.

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Posted in Categories: Australia, Economy, Releases, USA.

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