Resources, banks pull back market

The sharemarket has given back a large slice of Tuesday's gains to end lower, with resources the main drag on the market.

The ASX 200 closed 68.8 points lower at 5520.9 and the All Ordinaries declined 62 points to 5502.1. On the Sydney Futures Exchange, the March share price contract was down 71 to 5511, suggesting further falls, on a volume of 15,259 contracts.

Aequs Securities analyst Ric Klusman pinned much of the blame for the lower close on the resources sector.

"BHP Billiton is probably a main culprit," Mr Klusman said.

"People are concerned that the volatile trend and the weakness showing in commodities may continue, and that's why they're being nervous there."

BHP Billiton dropped 69c to $24.01 and rival Rio Tinto lost $1.54 to $70.10.

Mr Klusman also said that rumours of an impending interest rate rise were hurting the banking sector.

"There are some rumours that there will be a tightening of interest rates and banks are weakening," he said.

NAB backtracked 75c to $39.65, the Commonwealth dropped 69c to $48.82, Westpac shed 24c to $23.77, and ANZ lost 7c at $27.62.

Spot gold in Sydney ended US30c higher at $US612.80 per fine ounce. The big goldminers were mixed, Newcrest Mining falling 51c to $24.29 and Lihir Gold retreating 12c to $2.79. Newmont rose 2c to $5.56.

Qantas was the most traded stock of the day, with 100.43 million shares worth $532.88 million changing hands. The scrip ended 1c lower at $5.29.

Mr Klusman said the high volume was due to US fund manager Capital Group selling a large number of shares.

"They don't think it [the takeover] is going to go ahead," he said. "If they're deciding to get out you can probably expect a lot of others to get out."

Media stocks were mixed, News Corp gaining 57c to $29.55 and its non-voters rising 46c to $28.25, but Fairfax was down 6c at $4.72.

PBL fell 30c to $19.93, after its gaming joint venture with Melco International Development said it had raised an extra $US160 million ($205 million) to develop its Macau casinos.

Retailers were mixed, possibly also suffering from rumours of an impending interest rate rise.

The country's larger retailer, Woolworths, surrendered 9c to $22.83, David Jones was steady but Coles Group managed to eke out a gain of 3c at $13.98. Metcash was down 7c to $4.53.

The local bourse was not helped by Wall St, US stocks falling on Tuesday as a weaker oil price hit energy shares, but losses were limited by a rise in Apple Computers, which announced the release of a new combination iPod, touch screen mobile phone.

The Dow Jones industrial average fell 6.89 points to 12,416.60

But a rise in Apple shares helped the Nasdaq Composite index add 5.63 points to 2443.83.

Market turnover was 1.61 billion shares worth $5.77 billion, with 455 ending higher, 727 lower and 349 unchanged.