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Market Update

Resource Stocks Lead Australian Index Weakness

Author: Marcus Jacob
Last Update: 8:52 AM ET March 06 2015

5:30 PM Sydney Australian market indexes traded lower and for the week declined 0.5% after China lowered its growth estimate and iron ore prices continued to drift lower. Six smaller resource companies in the ASX 200 index will be replaced by retail, healthcare and travel management companies.

Stocks in Sydney pulled back after construction industry contracted and the index operator announced changes to the list of members in the ASX 200 index.

Six mining companies Atlas Iron Limited, BC Iron Limited, Mount Gibson Iron Limited, Horizon Limited, Lynas Corp and Beadell Resources will be replaced by the companies in healthcare, retail and travel industries.

Corporate Travel Management Limited, Dick Smith Holdings, Syrah Resources, Regis Healthcare and Australian Agriculture Company will be added to the index.

Seasonally adjusted performance of construction index in February decreased 2.0 from the previous month to 43.9 points, Australian Industry Group and Housing Industry Association said today.

The reading below 50 indicates contraction in the growth rate in the industry.

The capacity utilization not seasonally adjusted climbed to 72.6% from 66.5% in January, the announcement added.

Australian dollar closed at 78.08 U.S. cents and in stock trading turnover slipped to 732 million shares worth $4.5 billion.

ASX 200 Index edged down 5.30 to 5,898.90 and broader All Ordinaries Index slid 5.10 to 5,868.60. For the week, ASX 200 fell 0.5%.

In commodities trading, gold dropped US$5.35 to US$1,199.65 an ounce and light crude oil slipped 73 cents to US$50.76 a barrel.

Brent crude rose 34 cents to close at US$60.82 a barrel.

Australian Stock Movers

Australia and New Zealand Banking Group fell 0.3% to $35.39 after the banking and financial service provider completed the issuance of $970 million or 9.7 million shares priced at $100 each.

The first distribution payment date is expected to be on September 24.

Highfield Resources Ltd climbed 7.5% to $1.01 after the mineral explorer said revenues in the first-half ending in December surged 152% to $275,467 from $109,343 a year ago period.

Net loss in the period widened to $5.1 million compared to $2.9 million and diluted loss per share increased to 2.85 cents from 2.17 cents in the same period a year ago.

Regis Resources Limited tumbled 26.7% to $1.40 after the gold miner reported lower-than-expected production between 305,000 ounces and 355,000 ounces in the quarter to March.

Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc