Australian Market Marginally Lower

(RTTNews) - The Australian stock market drifted into negative territory and is marginally lower on Friday, following the weak cues overnight from Wall Street. However, gains by mining stocks helped to limit the downside.

In late-morning trades, the benchmark S&P/ASX 200 Index is down 18.40 points or 0.32 percent to 5,771.20, while the broader All Ordinaries Index is losing 18.80 points or 0.33 percent to 5,754.90.

In the mining sector, BHP Billiton (BHP) and Rio Tinto (RIO) are advancing more than 1 percent each. BHP Billiton said it has received oil exploration licenses from the government of the Caribbean island of Barbados.

Fortescue Metals is gaining more than 5 percent and BC Iron is higher by almost 7 percent after Brazilian mining giant Vale said it is prepared to withhold about 30 million tons of iron ore from its highest-cost mines if the weak market persisted. Vale's announcement is seen as a positive for iron ore prices.

Atlas Iron, which earlier said it will suspend mining at three iron ore mines, has now decided to keep operating two of those mines in Pilbara. Shares of the company were placed in a trading halt.

Meanwhile, gold miner Newcrest Mining is declining more than 1 percent and Evolution Mining is down more than 2 percent after gold prices fell 2 percent overnight.

Among the major banks, ANZ Banking, Commonwealth Bank, National Australia Bank and Westpac (WBK) are lower in a range of 0.2 to 0.6 percent.

National Australia Bank said it expects to raise up to $495 million from the sale of its controlling stake in regional US lender Great Western Bancorp Inc.

Former AMP chief executive Craig Dunn has been named to Westpac's board of directors. He will join the bank's board from June 1.

In the oil space, Woodside Petroleum is down 0.3 percent and Oil Search is declining 0.2 percent, while Santos is advancing more than 1 percent.

Virgin Australia reported a loss for the March quarter that narrowed from last year, on lower costs and improved passenger yields. The airline's shares are down almost 1 percent.

On the economic front, the manufacturing sector in Australia continued to contract in April, albeit at a slower pace, the latest survey from the Australian Industry Group revealed on Friday with a seasonally adjusted Performance of Manufacturing Index score of 48.0. That's up from 46.3 in March, although it remains below the boom-or-bust line of 50 that separates expansion from contraction.

In the currency market, the Australian dollar is lower against the U.S. dollar amid weaker iron ore prices and ahead of the RBA's board meeting next week. In early trades, the local unit was trading at US$0.7906, down from Thursday's close of US$0.7968.

On Wall Street, stocks closed sharply lower on Thursday, adding to the losses posted in the previous session. The weakness on Wall Street was partly due to ongoing uncertainty about the outlook for interest rates even after the Federal Reserve's monetary policy announcement on Wednesday.

The Dow tumbled 195.01 points or 1.1 percent to 17,840.52, the Nasdaq plummeted 82.22 points or 1.6 percent to 4,941.42 and the S&P 500 slid 21.34 points or 1 percent to 2,085.51.

Meanwhile, the major European markets ended modestly higher on Thursday. While the French CAC 40 Index inched up by 0.1 percent, the U.K.'s FTSE 100 Index and the German DAX Index both edged up by 0.2 percent.

U.S. crude oil surged to end higher for a third straight session on Thursday, on some upbeat jobless claims for unemployment benefits data from the U.S. with the dollar continuing to slide.

Crude oil futures for June delivery, the most actively traded contract, jumped $1.05 or 1.8 percent, to settle at $59.63 a barrel on the New York Mercantile Exchange Thursday. Oil prices are at its highest since mid-December.