Australia Shares End Down 0.2% on Falling Commodities Prices, Greece Concerns

SYDNEY--Australian stocks shrugged off a positive lead from Wall Street to close 0.2% lower Friday after softer oil and industrial metal prices hurt resources plays, while banks remained in the doldrums.

The S&P/ASX 200 index shed 11.4 points to 5545.3, ending a topsy-turvy week 0.9% stronger.

Copper prices slid to their lowest levels in seven weeks Thursday, dented by a stronger U.S. dollar and mixed economic data from China. The price of oil also fell amid lingering concerns about global glut, as did aluminum, lead, zinc, tin and nickel, though iron ore rose 0.5% to US$65.40/metric ton.

Light, sweet crude for July delivery settled down 66 cents, or 1.1%, to $60.77 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell 59 cents, or 0.9%, to $65.11 a barrel on ICE Futures Europe.

One of Australia's biggest movers was Energy Resources of Australia (ERA.AU). The uranium miner plunged 48% after majority shareholder Rio Tinto Ltd. said it didn't support the development of a deposit amid slumping uranium prices.

BHP Billiton Ltd. (BHP.AU ) and Rio Tinto (RIO.AU) shed 1.2% and 0.6%, respectively, while Woodside Petroleum Ltd. (WPL.AU) fell 0.3%.

Banking stocks, decimated in recent weeks by rising global bond yields, reversed some of this week's modest relief rally. Westpac Banking Corp. (WBC.AU) was the worst performer, falling 0.9%. Australia & New Zealand Banking Group (ANZ.AU) and National Australia Bank (NAB.AU) lost 0.3% and 0.8%, respectively, while Commonwealth Bank of Australia (CBA.AU) closed flat.

"The big four banks are becoming less ugly on fundamentals," said Evan Lucas, a strategist at Melbourne-based IG, noting they are trading at a 31% discount to industrial peers on a price-to-earnings ratio basis.

Investors are cautious, too, amid uncertainty about Greece's financing negotiations after the International Monetary Fund said it was halting bailout talks, frustrated about the lack of progress towards a deal.

"With yesterday's confidence on Greece being turned around, stock markets have been forced reluctantly back to a cautious frame of mind," said Ric Spooner, strategist at Sydney-based CMC Markets.

Write to Ross Kelly at [e-mail]