Shares dive, caps off weakest start to year in 17 years

The Australian stock market failed to follow Wall Street's higher lead overnight, with the benchmark index falling below the 6,000 mark, leaving investors nursing the weakest start to new year trading for 17 years.

The benchmark S&P/ASX200 index shed 97.1 points to 5981.6, while the All Ordinaries fell 92.9 points to 6054.4.

On the Sydney Futures Exchange at 1619 AEDT, the March share price index was down 69 points at 6,000 on volume of 23,312 contracts.

In the US overnight, the Dow Jones industrial average had put on 117.78 points to 12,853.09, the Standard & Poor's 500 Index had gained 11.2 points to 1,420.33 and the tech-heavy Nasdaq picked up 13.97 points to 2,488.52.

CommSec chief equities economist Craig James said Australian investors were taking a very defensive stance, which he believed was a short term strategy.

"It doesn't make a lot of sense when you consider the US economy is teetering on recession but the Dow Jones is higher than what it was last Friday," Mr James said.

"The Australian economy, by contrast, is in super strong shape and our share market is down, so there doesn't seem to be any rhyme or reason."

Mr James said soft markets were being seen across the Asia Pacific region, with both Korean and Japanese markets down today.

"There is also a degree of optimism overseas with ... moves by the Bank of America to investigate taking over Countrywide, the number one mortgage lender in the US," he said.

Locally, consumer staples were performing well, with Woolworths being one of the few strong performers, he added.

Woolworths closed 42 cents stronger to $33.36. As for the other retailers, Coles owner Wesfarmers had shed 92 cents to $38.00, up-market department store chain David Jones had dipped two cents to $4.90 and franchise Harvey Norman was up 12 cents to $6.09.

The financial sector was in the red with Commonwealth Bank down $1.06 to $55.89, National Australia Bank lost 12 cents at $35.20, ANZ dipped 39 cents to $25.72 and Westpac, which increased interest rates today, was 60 cents weaker at $26.00.

Media stocks were mixed. News Corp. was down eight cents to $22.16, its non-voting scrip was steady at $21.64, Fairfax had edged one cent lower to $4.50 and Consolidated Media had dropped five cents to $3.90.

The big miners were weaker. BHP Billiton was 79 cents down at $38.30 and takeover target Rio Tinto had shed $2.40 at $125.60.

Energy stocks also were down following the weaker oil price on the New York Mercantile Exchange. Oil Search had dipped 18 cents to $4.73, Woodside Petroleum was 67 cents lower at $50.85 and Santos had lost 20 cents to $14.24.

In Sydney, the spot price of gold was $US893.40 per fine ounce, up $US15.00 from Thursday's local close of $US878.40 per fine ounce.

Gold miners were mixed. Lihir Gold finished three cents higher to $3.94, Newmont had shed 11 cents to $5.95 and Newcrest had dropped 26 cents to $37.99.

Making headlines today, Centro Properties Group and Centro Retail Group securities have been placed in a trading halt pending the release of an announcement.

The halt will remain until either normal trading begins on January 15 or an announcement is made.

Centro Properties last traded at 86 cents while Centro Retail last traded at 58.5 cents.

Health services company Primary Health Care has nudged forward in its quest to take over rival Symbion Health, with its relevant interest in Symbion now at 36.15 per cent, up from 36.05 per cent.

Symbion's shares closed four cents weaker to $3.86 while Primary's shares were five cents stronger to $11.72.

Allegiance Mining NL's major shareholder, China's Jinchuan Group, backed the nickel hopeful in rebuffing Zinifex Ltd's unsolicited takeover offer, sending Allegiance's shares one cent higher to $1.05 and Zinifex's shares 44 cents lower to $11.09.

Also, coal seam gas producer Arrow Energy today announced its first deal in Vietnam. Its shares finished two cents higher to $2.39.

The most traded stock today was Gondwana Resources with a volume of 80.38 million shares changing hands for a total value of $3.62 million.

Its stock closed up 0.1 of a cent to 4.4 cents.

Total turnover was 1.58 billion shares with a total value of $5.7 billion, with 395 stocks up, 883 down and 347 unchanged.

INDEX MOVEMENT POSITION INDEX MOVEMENT POSITION
S&P/ASX200 -97.1 5981.6 Dow Jones +117.78 12853.09
All Ords -92.9 6054.4 S&P 500 +11.2 1420.33
SPI contract -69.0 6000.0 Nasdaq +13.97 2488.52
Gold $USoz +14.90 893.30 Nikkei -252.45 14135.66
$A/USD -.0012 0.8946 NZSE-50 -27.705 3872.179