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Australia shares fall 0.6 pct; Macquarie drops

Published: 24 May 2009 22:59:48 PST

SYDNEY, May 25 - Australian shares fell 0.6 percent on Monday to a one-week closing low as banking stocks, such as Macquarie Group Ltd <MQG.AX>, fell after the market regulator lifted a shortselling ban on financial stocks.

Gains in mining stocks, on the back of strong metal and oil prices, limited losses in the broader market, but some investors were caught off-guard by the lifting of the ban a week ahead of the planned review of shore sale ban. For a detailed story: [ID:nSYD445758].

"Probably it's just the surprise factor today. Instead of the day being focused on the miners, which we thought it would be, instead it's now all about the banks," said Juliette Saly, a market analyst at broker CommSec.

George Kanaan, research sales desk head at UBS also pointed to the day's light volumes and said the lifting of the ban might have kept some buyers on the sidelines on Monday, waiting to take advantage of any drop in share prices.

The S&P/ASX 200 index <.AXJO> stood 23.7 points lower at 3,737.9, its lowest close sine May 18, based on the latest available data. New Zealand's benchmark NZX 50 index <.NZ50> lost 0.7 percent at 2,740.2.

Macquarie Group, Australia's top investment bank, slipped 6.6 percent to A$31.28. Macquarie has been a target of short sellers, analysts said.

Westpac Banking Corp <WBC.AX>, the No. 2 lender, lost 3.6 percent to A$18.68 and top lender National Australia Bank Ltd <NAB.AX>, shed 2.8 percent to A$21.15.

Commonwealth Bank of Australia Ltd <CBA.AX>, No 3. lender, fell 2.0 percent to A$34.80 and Australia and New Zealand Banking Group Ltd <ANZ.AX> weakened 1.4 percent to A$15.20.

But mining stocks were supported by strong oil and metal prices. Top miner BHP Billiton Ltd <BHP.AX> gained 1.2 percent to A$33.87 while Woodside Petroleum Ltd <WPL.AX> added 0.2 percent to A$42.50.

Blood products maker CSL <CSL.AX> dropped 1.8 percent to A$30.35 after the company said U.S. Federal Trade Commission officials were opposed to its planned $3.1 billion purchase of smaller U.S. rival Talecris Biotherapeutics Holdings Corp. [ID:nSYD481892]