Australian stocks resume falls banks lower

(Adds details, comments)

SYDNEY, July 10 (Reuters) - Australian shares fell 1.6 percent on Thursday, with financial firms such as National Australia Bank Ltd (ASX: NAB.ax) leading losses on concerns about credit market losses and slowing economic growth.

Conglomerate CSR Ltd (ASX: CSR.ax) slumped over 15 percent to log its biggest one-day fall in over a decade after it gave an earnings outlook that was well below market forecasts [ID:nSYD6298].

Fund managers said equity markets face several headwinds, including rising inflation, slowing company earnings and persistent credit concerns, making it difficult to see a sustained recovery over the next few months.

"Unless we see some kind of concerted move downwards in oil prices ... markets are going to remain extremely concerned that we're going to face a large threat from inflation," said Angus Gluskie, portfolio manager at White Funds Management.

"We're going to continue to see bad debt levels escalate in the banking sector, but that's not unexpected, and loan growth rates are certainly coming down," he added.

The benchmark S&P/ASX 200 index JO fell 77.9 points to 4,934.0 by 0104 GMT, after rising 1.6 percent in the previous session.

New Zealand's benchmark NZX-50 index .NZ50 fell nearly 2 percent, or 62.55 points, to 3,114.92. The most heavily weighted stock, Telecom Corp of New Zealand (NZX: TEL.nz) , was down 4.3 percent at NZ$3.36.

STOCKS ON THE MOVE

* Financial firms resumed their falls after a brief respite in the previous session, on persistent concerns about credit losses.

Among the big banks, National Australia Bank Ltd (ASX: NAB.ax) lost 2.9 percent to A$26.80 and Commonwealth Bank of Australia Ltd (ASX: CBA.ax) fell 2.9 percent to A$40.27.

Australia and New Zealand Banking Group Ltd (ASX: ANZ.ax) fell 3 percent to A$18.23 while Westpac Banking Corp (ASX: WBC.ax) was down 3.4 percent at A$19.02.

Macquarie Group MQG, Australia's top investment bank, shed 2 percent to A$47.84.

0059 GMT

* CSR dropped 13.9 percent to A$1.99 after it said it expected earnings before interest and tax (EBIT) to rise over 5 percent in its current fiscal year, short of analysts' forecasts for 13.8 percent growth.

CSR shares fell as much 15.2 percent in early trade, posting its largest single-day percentage drop since October 1987.

0057 GMT

* Some mining firms advanced after following gains in metals prices such as gold XAU=, zinc and nickel.

Kagara Zinc (ASX: KZL.ax) added 5 percent to A$3.56 and nickel miner Independence Group NL (ASX: IGO.ax) added 3.8 percent to A$4.33.

Among gold miners, Newcrest Mining (ASX: NCM.ax) rose 4.5 percent to A$30.87 and Lihir Gold LGL gained 2.3 percent to A$3.09.

0055 GMT * Shares in New Zealand clothing retailer Hallenstein Glasson (NZX: HLG.nz) fell nearly 6 percent to NZ$2.53, after the company said full-year profit would fall about 30 percent on deteriorating retail markets.

0053 GMT ($1=A$1.05) (Reporting by Geraldine Chua)

More Quotes and Company Information:AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED (ASX: ANZ.ax)COMMONWEALTH BANK OF AUSTRALIA.(ASX: CBA.ax)CSR LIMITED(ASX: CSR.ax)INDEPENDENCE GROUP NL(ASX: IGO.ax)KAGARA ZINC LIMITED(ASX: KZL.ax)NATIONAL AUSTRALIA BANK LIMITED(ASX: NAB.ax)NEWCREST MINING LIMITED(ASX: NCM.ax)WESTPAC BANKING CORPORATION(ASX: WBC.ax)Hallenstein Glasson Holdings Limited(NZX: HLG.nz)Telecom Corporation of New Zealand Limited(NZX: TEL.nz) ... read original article
Thu 10th July 2008 - 11:21am