RTTNews - After a weak start and a subsequent rise from lower levels, the Australian market has faltered into the red on Thursday, with a few materials stocks suffering sharp losses on selling pressure. Healthcare, utilities, financial and consumer staples stocks are trading firm, while energy and industrial stocks are exhibiting a mixed trend.

The S&P/ASX 200 index, which rose to 3,922 after opening in the red, is currently trading at 3,888, down 16 points from its previous close. The All Ordinaries index is down by 21 points at 3,883.

On Wednesday, amid concerns over economic growth and lower commodity prices, the S&P/ASX 200 had ended lower by 58.40 points or 1.5% at 3,904. The All Ordinaries slipped by 53.70 points or 1.36% to 3,904.

Materials stocks Rio Tinto is down by nearly 7% and BHP Billiton is trading lower by 2.5%. However, Orica is trading firm with a 2.3% gain.

In the banking space, Commonwealth Bank of Australia and National Australia Bank are trading firm with sharp gains, while ANZ Bank and Westpac Banking are trading modestly higher.

Australian oil and gas firm Santos Ltd has agreed to sell liquefied natural gas from its Gladstone project to venture partner Malaysia's Petronas, securing its first sales contract for the project.

Santos has agreed to sell 2 million tonnes of LNG a year to the state-owned Petroliam Nasional Berhad, also known as Petronas, for 20 years beginning in 2014. Petronas, which owns a 40 percent stake in Gladstone, located in eastern Queensland state, also has an option to buy an additional 1 million tonnes of LNG a year, Santos said. Santos is currently trading nearly 4% up over its previous close.

Macarthur Coal Ltd is raising about A$190 million via an equity issue to funds its future growth, riding on a recent rally in stock markets. China's CITIC Group, Macarthur's biggest shareholder, will participate in the offer and maintain its 23.39 percent holding in Macarthur's expanded capital, Macarthur said in a statement on Thursday. The new shares are being offered at A$6.00 each, a 9.4 percent discount to its last traded price. Trading in its shares has been halted pending completion of the offer.

In another corporate news, engineer and builder Decmil Group's subsidiary and its joint venture partners have bagged a A$500 million contract to design and construct an accommodation village for Chevron Australia Pty Ltd on Barrow Island, off the Western Australian coast.

The village will accommodate 3,300 people working on the Chevron-operated Gorgon gas project. The project will go ahead once regulatory approvals are received and the Gorgon participants make a final investment decision, expected in the second half of 2009.

Decmil's share of the total contract value is expected to be around A$170 million, making it the company's largest single contract. The stock of the Decmil, earlier known as Paladio Group, is up by over 21% at present.

In the currency market, the Australian dollar opened lower on Thursday despite a fresh bout of U.S. dollar weakness following soft U.S. inflation data. The local currency had dropped below $US0.7900 early in offshore trade, but jumped sharply after the U.S. dollar came under heavy selling pressure in response to weaker-than-expected rise in U.S. consumer prices.

Earlier this morning, the Australian dollar was trading at $US0.7943/47, down from Wednesday's close of $US0.7992/94. The Australian dollar is currently trading at 0.7954 to the U.S. dollar.

In economic news, The Reserve Bank of Australia will publish its monthly bulletin, including the latest data on credit card spending. The Australian Bureau of Statistics releases international merchandise imports data for April.

Among other markets in the Asia-Pacific region, Japan, Singapore and Korea are trading weak. The New Zealand market is trading modestly higher.

After a choppy ride, amid mixed sentiment with regard to the near-term prospects of the economy and the proposed financial system reforms from the Obama administration, the major indices closed flat on Wall Street on Wednesday. The data on consumer prices showed a modest increase in the month of May, but the rise was less than what the economists had expected.

Unable to hold on to their earlier gains, the Dow slipped 7.49 points to 8,947.18 and the S&P 500 dropped by 1.26 points to 910.71. The Nasdaq, however, ended higher by 11.88 points at 1,808.06.

Stock markets across the Asia Pacific region ended Wednesday's trading on a mixed note. Japan's benchmark Nikkei 225 Index closed up 0.9 percent, while Hong Kong's Hang Seng finished down 0.5 percent.

Major European markets all closed firmly in the red, with the French CAC 40 Index and the German DAX Index falling by 1.6 percent and 1.9 percent, respectively. The U.K.'s FTSE 100 Index also finished notably lower, dropping by 1.2 percent.

Oil prices finished a choppy session modestly higher on Wednesday in U.S. trading as investors mulled the Energy Information Administration inventories report. Oil gained strength in the afternoon as the dollar gave back some early gains.

Light sweet crude ended the day at US$71.03, up 56 cents on the session. After hitting a high of US$71.28, oil slipped to as low as US$69.

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