Australia shares tumble to three week lows on Wall Street losses

Mon Jan 13, 2014 7:19pm EST
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(Adds analysis, quotes, stocks on the move)

SYDNEY Jan 14 (Reuters) - Australian shares lost 1.1 percent on Tuesday, its biggest one day loss in six weeks, after Wall Street tumbled overnight as investors exercise caution ahead of the corporate reporting season and iron ore prices fell to near-record lows.

Bluechip stocks all fell in a broadbased selloff. Among the Big Four banks, the Commonwealth Bank of Australia fell 0.9 percent while Westpac Banking Corp lost 0.8 percent.

The defensives sector also tumbled with consumer staple retailers Wesfarmers Ltd and Woolworths Ltd down 1.2 percent and 1.1 percent each while Australia's biggest telephone company Telstra Corporation Ltd shed 0.5 percent.

The S&P/ASX 200 index lost 55.6 points to 5,236.5 by 0007 GMT, its lowest point since December 20. The benchmark fell 0.4 percent on Monday.

"A key concern of market participants, given the exceptional run in 2013, is whether the run can continue in 2014 even amid the winding back of Fed stimulus," said Tim Radford, global analyst at Rivkin Securities in a note.

"For the rally to remain sustainable, it could be healthy to see a meaningful pullback in equities over the short-term, allowing for bullish optimism to subside to less bearish levels."

Heavyweight iron ore miners BHP Billiton Ltd and Rio Tinto Ltd dropped 1.2 percent and 0.9 percent after Chinese iron ore futures fell 1 percent to their lowest since contracts were launched in October, as weaker steel prices curbed demand for the raw material. World no.4 iron ore miner Fortescue Metals Group Ltd slipped 0.4 percent.

U.S. stocks tumbled on Monday on caution ahead of corporate results, as a growing number of negative pre-announcements dimmed the profit growth outlook.   Continued...