By Robb M. Stewart
MELBOURNE, Australia--Australian stocks fell to fresh more than
one-month lows Thursday as signs of slowing manufacturing activity
in China added to renewed worries about the U.S. central bank's
plans to scale back its massive monetary stimulus measures.
Markets across much of Asia got off to a weak start as investors
took the Federal Reserve's minutes for its October policy meeting
as a signal that it will scale back its bond buying in the coming
months as the economy improves. Later in the session, a preliminary
gauge of manufacturing activity in China--Australia's biggest
trading partner--showed a mild weakening of growth momentum in
November.
The Chinese data and a resurgent U.S. dollar also weighed on the
local currency.
"Investors are back to trading with more conviction, with a
notable uptick in volumes today," said Betty Lam, a sales trader at
CMC Markets in Sydney.
The benchmark S&P/ASX 200 finished the day 0.4% lower at
5288.3, its lowest point since Oct. 18.
Shares of gold producers were particularly hard hit, reacting to
an overnight slump in the bullion price following the Fed minutes.
Major banks, which have had a strong run higher for much of the
year, were also lower.
Stan Shamu, market strategist at IG in Melbourne, said the main
focus for the day was a slightly more hawkish tone from the Fed,
which he added will increase the significance of upcoming jobs data
for November for investors pondering when "tapering" of the
stimulus program might begin.
"On the other hand, the minutes are a bit stale, and judging by
the recent comments from some key Fed members, I still feel
tapering in the first quarter of 2014 is the most likely outcome,"
Mr. Shamu said.
Gold miner Newcrest Mining closed 4% lower, while St. Barbara
lost 9.2% and AngloGold Ashanti dropped 10%.
BHP Billiton added just one cent after staging the Australian
leg of its annual shareholders' meeting, during which Chairman
Jacques Nasser said he was confident that the U.S. economic
recovery would continue and China's growth was likely to top 7%
next year.
WorleyParsons lost a further 1.8%, adding to a sharp decline a
day earlier after it reduced its earnings expectations for a second
time this year.
Australia & New Zealand Banking Group and National Australia
Bank both lost 0.3%, while Westpac fell 0.4% and Commonwealth Bank
of Australia dropped 0.8%.
Write to Robb M. Stewart at robb.stewart@wsj.com
