Australia Stocks Decline as Slowdown Weighs on Profits, Metals

By Shani Raja

Dec. 1 (Bloomberg) -- Australian stocks fell as the deteriorating global economy weighed on corporate profit growth and commodity prices.

Brambles Ltd., the world’s biggest supplier of pallets used to move and store goods, plunged 6.1 percent. BHP Billiton Ltd., the world’s largest mining company, sank 4 percent, while rival Rio Tinto Group plunged 5.5 percent.

The S&P/ASX 200 Index lost 2 percent to 3,668.20 at 11:50 a.m. in Sydney, eroding the biggest weekly gain in the benchmark’s history dating back to 1992. The index has slumped in each of the past three months.

The benchmark has tumbled 46 percent from its Nov. 1, 2007, record as the credit crunch prompted a global recession. The Bureau of Statistics said in Sydney today that Australia’s corporate profit growth slowed in the third quarter as earnings at retailers, transportation businesses and manufacturers dropped.

Brambles lost 6.1 percent to A$6.81. BHP declined 4 percent to A$29.77, the most since Nov. 20. Rio dropped 5.5 percent to A$44.03. A measure of six metals traded in London fell 1.4 percent on Nov. 28. Zinc dropped 0.8 percent, copper 2.1 percent and nickel 0.5 percent.

Woodside Petroleum Ltd. (WPL AU) sank 79 cents, or 2.2 percent, to A$35.26, after Organization of Petroleum Exporting Countries deferred a decision on reducing production this year by two weeks, as it seeks to push oil prices up to $75 a barrel. Crude has dropped 62 percent from July’s record of $147.27 a barrel as the global recession erodes sales.

Australia’s S&P/ASX 200 Index surged 9.5 percent last week, as China, the biggest user of industrial metals and the world’s No. 2 energy consumer, cut interest rates the most in 11 years to ward off an economic slump.

To contact the reporter on this story: Shani Raja in Sydney at sraja4@bloomberg.net.