(RTTNews) - The Australian stock market closed lower on Monday, ending a three-day winning streak. The market started off higher after Wall Street finished mixed on Friday, but soon lost ground amid weakness among the resources stocks. The benchmark SP/ASX 200 index closed down 58.3 points or 1.6% at 3,557.4 and the broader All Ordinaries index shed 54.9 points or 1.5% to 3,492.3.

In the currency market, the Australian dollar closed lower against the greenback. The Aussie finished the domestic session at US$0.6816-0.6822, down from Friday’s close of US$0.6858-0.6865.

Wall Street finished mixed on Friday as the strong upward move seen in early trading on the back of a government bailout of the auto industry lost steam over the course of the day following a steep fall in oil prices. The Dow closed down 25.9 points or 0.3% at 8,579.1, while the Nasdaq rose 12.0 points or 0.8% to 1,564.3 and the S&P 500 advanced 2.6 points or 0.3% to 887.9.

Oil prices rose above $43 a barrel on Monday in Asia amid speculation that OPEC’s production cuts next month and the economic stimulus measures announced by the U.S. will help stabilize oil prices. Light, sweet crude for February delivery gained 70 cents to $43.06 a barrel in electronic trading on the New York Mercantile Exchange by 01:06 a.m. ET after the contract fell 69 cents to settle at $42.36 a barrel on Friday. The January contract, which expired on Friday, plunged 6.5% to $33.87 a barrel, the lowest settlement since February 10, 2004.

On the economic front, data released by the Australian Bureau of Statistics showed that new motor vehicle sales fell in November by a seasonally adjusted 5.2% from October. New vehicle sales were also lower by a seasonally adjusted 17.8% from last year.

In the resources sector, index leader BHP Billiton dropped 0.9%, while Rio Tinto plunged 4.2% on news that it is shutting down its Hismelt pig iron production plant in WA for three months due to a drop in demand. Fortescue Metals Group tumbled 20.6% after it issued A$3.6 million worth of shares to pay a contractor as a way of protecting its cash reserves. Among energy stocks, Santos fell 4.7% and Oil Search lost 4.5 % after crude oil for January delivery, which expired on Friday, plunged 6.5% to $33.87 a barrel, the lowest settlement since February 10, 2004..

Arrow Energy made a friendly takeover offer for Pure Energy Resources, valuing the company at A$673 million. Pure jumped 50%, while Arrow fell 11%.

Banks closed mixed. Comonwealth Bank fell 2.7%, NAB shed 2.0% and Westpac plunged 3.1%, while ANZ Bank advanced 1.5%. Investment bank Macquarie Group plummeted 3.2%. Elsewhere in the financial sector, Suncorp Metway sank 5.7% and insurer QBE dropped 2.1%.

Babcock and Brown Power shares surged 44% after the company said that it is reviewing a number of submissions it has received from third parties to acquire the business.

Qantas shares fell 3.8%. After the market closed, the airline said that it would be cutting its international and domestic fuel surcharges by about 15% from Tuesday December 23.

Envestra, Australia’s biggest natural gas distributor jumped 10% after the company raised its fiscal 2009 profit after tax forecast by 20% to A$30 million. It also announced an A$111 million rights issue at A$0.30 per share.

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

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