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Australian Market Notably Lower

The Australian stock market is notably lower on Monday following the weak cues from Wall Street on Friday as rising bond yields and the prospects of higher interest rates dampened investor sentiment. In addition, weak commodity prices dragged resources stocks lower.

In late-morning trades, the benchmark S&P/ASX 200 Index is declining 75.50 points or 1.23 percent to 6045.90, off a low of 6,031.00 earlier. The broader All Ordinaries Index is down 79.30 points or 1.27 percent to 6,150.50.

The major miners are higher following a dip in iron ore prices. Fortescue Metals is declining almost 1 percent, Rio Tinto is lower by almost 2 percent and BHP Billiton is losing more than 2 percent.

Among gold miners, Newcrest Mining is down more than 1 percent and Evolution Mining is falling more than 3 percent after gold prices also fell.

In the oil sector, Santos is lower by more than 3 percent, while Woodside Petroleum and Oil Search are declining more than 2 percent each after crude oil prices slipped on Friday.

AWE Ltd. said its board has decided that a takeover offer of 95 cents per share from Japanese firm Mitsui & Co. is the best option among proposals from three suitors vying for control of the company. The oil and gas producer's shares are down more than 3 percent.

The big four banks - ANZ Banking, National Australia Bank, Westpac and Commonwealth Bank - are losing a range of 0.8 percent to 1.2 percent.

Westpac said it has recorded another A$8.63 billion of mortgages switching from interest-only to principal and interest in the first quarter.

Downer EDI has projected a goodwill impairment charge of A$77 million on its mining operations in the first half of the year after failing to renew two material contracts and due to delays in securing alternative business. Shares of the heavy engineering company are lower by more than 3 percent.

Wesfarmers announced executive changes at Bunnings UK, its underperforming UK hardware business that was responsible for the majority of its A$1.3 billion in first-half writedowns and impairments. The company's shares are falling more than 4 percent.

On the economic front, Australia will see January numbers for the Performance of Service Index from AiG, plus the inflation forecast for January from TD Securities today.

In the currency market, the Australian dollar is weaker against the U.S. dollar, which was rebounded on better-than-expected U.S. jobs data. The local unit was quoted at US$0.7901, down from US$0.8001 on Friday.

On Wall Street, stocks closed sharply lower on Friday as traders worries about the prospects of higher interest rates after the Labor Department released a report showing stronger than expected job growth and a jump in wages. A negative reaction to quarterly results from big name tech companies like Google parent Alphabet and Apple also contributed to the sell-off.

The Dow tumbled 665.75 points or 2.5 percent to 25,520.96, the Nasdaq slumped 144.92 points or 2 percent to 7,240.95 and the S&P 500 dove 59.85 points or 2.1 percent to 2,762.13.

The major European markets also showed notable moves to the downside on Friday. While the U.K.'s FTSE 100 Index dropped by 0.6 percent, the French CAC 40 Index and the German DAX Index tumbled by 1.6 percent and 1.7 percent, respectively.

Crude oil futures also responded negatively to the U.S. jobs report on Friday. WTI crude for March delivery dipped $0.35 to $65.45 per barrel on the New York Mercantile Exchange.

by RTTNews Staff Writer

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