By Robb M. Stewart
MELBOURNE, Australia--Australian equities ended the week lower,
snapping a run of seven straight weekly gains as investors have
grown increasingly uneasy about the fallout for the world's biggest
economy from the budget impasse in Washington.
The local market had proved largely resilient following the
partial shutdown of the U.S. government, edging higher in the
previous two sessions after falling from a five-year high at the
start of the week. But sentiment was knocked Friday by a further
wave of selling on Wall Street that knocked 0.9% off both the Dow
Jones Industrial Average and S&P 500.
The impact of the U.S. shutdown is likely to be limited for
Australia, since more than 80% of its exports are destined for
Asia, but it comes just weeks before a crucial deadline for
lawmakers in Washington to raise the nation's borrowing limit.
"Funding the government's activities is a sideshow compared to
the extension debt ceiling. If U.S. lawmakers fail on this count, a
debt default would have severe ramifications for global markets in
the immediate future," said Tom Piotrowski, a market analyst at
Commonwealth Securities.
The S&P/ASX 200 fell 0.5% to close at 5208. That left the
benchmark index down 1.9% for the week.
"It's all about the waiting game and another weekend of U.S.
politicking," said Michael Bogoevski, head of sales trading at CMC
Markets in Sydney.
The mining sector led broad losses, with BHP Billiton dropping
1.3% and Rio Tinto down 0.5% after an overnight fall in the price
of copper.
Financial shares were also weaker, with ANZ and Westpac both
declining 0.7% and National Australia Bank falling 0.2%.
Leighton Holdings lost 4.6%, building on Thursday's 10% dive
following critical local newspaper reports.
Several gold stocks bucked the trend, rising as the price of the
precious metal held above US$1,300 an ounce as the U.S. government
shutdown entered a fourth day. Norton Gold Fields advanced 7.7%,
Kingsrose Mining rose 3.8% and Alacer Gold added 0.7%.
Iluka Resources added 2.7%, helped by RBC lifting its stance on
the shares to outperform from sector perform.
The market will be open Monday although it is a public holiday
in New South Wales, Queensland and South Australia states.
"Many traders will be taking an extended break next week, so
there have been a few traders happy to square off positions ahead
of the weekend," said Chris Weston, chief market strategist at IG
in Melbourne.
Write to Robb M. Stewart at robb.stewart@wsj.com