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Australian stocks end soft

SYDNEY: Australian stocks fell amid heavy trading on Monday, led lower by negative signals from Wall Street futures as a longer-than-expected war unfolds in Iraq.

The benchmark S&P/ASX 200 index declined 12.5 points or 0.4 percent to 2,885.2, up three percent on the month but down 15.5 percent compared with a year ago and down four percent in the March quarter.

Volume ballooned to A$4.3 billion ($2.6 billion) compared with a 2002 daily average of A$2.1 billion as institutional investors closed out positions at the end of a volatile quarter.

"The Gulf is the main driver of the markets and it's changing on a daily basis depending on what commentary we're getting out of the US and how things are going," said Paul Fiani, head of Australian equities at UBS Global Asset Management.

"People are revising their expectations on how long it's going to take. People initially thought it would be a matter of days or weeks and now they're thinking in terms of months. We're certainly not factoring in years though," he said.

June Nasdaq futures and June Standard & Poor's 500 futures both pointed to falls of more than one percent on Wall Street later on Monday.

Dragging the Australian market lower, News Corp fell 2.4 percent to A$10.77, BHP Billiton fell 0.8 percent to A$9.28, Rio Tinto fell 1.2 percent to A$31.03 and Brambles fell 1.9 percent to A$4.56.

Qantas Airlines, down 9.6 percent on Friday after warning that the Iraqi war and Severe Acute Respiratory Syndrome (SARS) scare would hit passenger volumes, fell another one percent to A$2.97 as analysts downgraded profit forecasts.

Freshly split sugar, aluminium and building materials group CSR Ltd made a ho-hum debut as two separately listed companies, CSR and Rinker

Rinker debuted at A$4.85 a share and closed at A$4.93 for a market value of A$4.7 billion, while CSR opened at A$1.55 and closed at A$1.60 for a market value of A$1.5 billion.

On the upside, high-yield property trusts continued to shine as the sector attracts merger and acquisition activity.

Stockland rose 1.8 percent to A$4.97 after taking a strategic 15 percent stake in AMP Diversified Property Trust last week.

Life insurer and fund manager AMP Ltd, ex-dividend 20 cents, dropped 7.3 percent to A$7.02 as its listed property trusts come under attack by predators.

Terry Gray, head of equities at Allianz Dresdner Asset Management, cited weaker British shares, the ex-dividend element, and concerns about the potential risk to trust management fees for AMP's fund management arm if the trusts get snapped up.

Gold and tantalum miner Sons of Gwalia, heavily sold down in the last month, rallied 7.5 percent to A$1.72 as investors anticipated a longer-than-expected war in Iraq.

Newcrest rose 2.6 percent to A$6.36, Lihir Gold rose 3.9 percent to A$1.35 and Oxiana Resources rose 4.2 percent to A$0.50 as gold prices climbed in Asian trade.

Spot gold last traded at $334.50 an ounce, up from London's Friday fix at $330.75.

A US cruise missile struck Iraq's Information Ministry on Monday while other blasts hit a palace used by President Saddam Hussein's son as the fierce air assault on Baghdad entered its 12th day. Other raids, which have increased in intensity over the past 48 hours, also targeted the northern city of Mosul.-Reuters