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AAP

2013-01-04

Australian stocks have closed weaker as declines among the major miners dragged the broader market lower and snapped a two-day rally.

At 1615 AEDT on Friday, the benchmark S&P/ASX200 index was down 16.9 points, or 0.36 per cent, at 4,723.8 points, while the broader All Ordinaries index had fallen 18.5 points, or 0.39 per cent, to 4,742.9 points.

On the ASX 24, the March share price index futures contract was 13 points lower at 4,703 points, with 20,395 contracts traded.

The Australian market opened down about 0.3 per cent, following a disappointing night on Wall Street as US investors reacted negatively to news the US central bank may consider ending its quantitative easing program earlier than expected.

After the poor start, local stocks remained stuck in red figures but held their ground to trade in a tight range throughout Friday's local session, ending a two-day rally that had pushed the S&P/ASX200 to a 19-year high.

The S&P/ASX200 closed at its highest level since May 2011 on Thursday and the market had risen about two per cent over the first two trading days of 2013.

CMC Markets chief market strategist Michael McCarthy said the declines on Friday were a healthy sign for the local bourse.

"We've had such strong runs in both the US market and the local market," Mr McCarthy said.

"We need a bit of a flush, a bit of a correction or at least a pause to consolidate to bring new buyers into the market.

"A concern from an investor's point of view is when a market runs and runs in one direction because inevitably that then leads to a very significant correction."

Gold was the worst-performing sector on Friday, tumbling 3.48 per cent according to IRESS data.

Metals and minerals stocks (down 1.34 per cent) and the materials sector (down 1.17 per cent) were also deep in negative territory.

BHP Billiton fell 24 cents to $37.91, while Rio Tinto was off 70 cents at $68.55.

One bright spot was financial stocks - a large component of the Australian market - with the big four banks all posting gains.

ANZ climbed eight cents to $25.26, CBA advanced one cent to $63.25, NAB rose six cents to $25.31 and Westpac was six cents firmer at $26.25.

Making news on Friday, Atlas Iron said it was on track to produce up to 7.7 million tonnes of iron ore in the 2013 financial year after bringing its third Pilbara iron ore mine into production.

Atlas was down six cents at $1.81.

Macmahon Holdings said an existing agreement to sell its construction operations to Leighton Holdings meant it was unable to let an Indian-based bidder that emerged on Thursday conduct due diligence on the assets.

Macmahon was up 0.5 cent at 29 cents, while Leighton was 35 cents higher at $19.00.

The spot price of gold in Sydney was $US1,649.90 per fine ounce, down $US36.53 from Thursday's local close of $US1,686.43 per ounce.

Preliminary national turnover was 1.1 billion securities worth $2.4 billion, with 384 stocks up, 499 down and 371 unchanged.