Shares slip on US fears

The Australian share market closed marginally lower today, dragged back by more fears over the health of the banking sector.

At the 4.15pm close, the benchmark S&P/ASX200 index was down 20.5 points, or 0.38%, at 5351.1, while the broader All Ordinaries fell 17.3 points, or 0.32%, to 5401.2.

On the Sydney Futures Exchange, the June share price index futures contract was 17 points lower at 5408 on a volume of 20,238 contracts, according to preliminary calculations.

CMC Markets senior dealer Matt Lewis said the the big weight today on the local bourse was the finance sector, which followed banks in the US downwards.

Leading US banks fell overnight on speculation that Lehman Brothers faces funding shortages. Lehman said the speculation was unfounded.

''It's the same theme of negative sentiment globally and recession fears, but the comment from Lehman Brothers overnight put the negative to the forefront,'' Mr Lewis said.

He said the ANZ bank was put under pressure locally, on the back of investor concerns about the banks's corporate lending exposure to financial services group Opes Prime, which has been placed in receivership.

The ANZ said today that it was unlikely to experience a material loss on its exposure. ANZ dropped 67 cents to $23.18.

National Australia Bank declined 79 cents to $29.96 as it said it expected an after-tax gain of about $221 million from its shareholding in Visa, following the credit card giant's float on the New York Stock Exchange.

Westpac dumped 68 cents to $23.90 but Commonwealth Bank added 40 cents to $42.71.

On Wall Street overnight, the Dow Jones industrial average fell 120.40 points to 12,302.46.

In the resources sector, global miner BHP Billiton was 29 cents richer at $36.05, and Rio Tinto lifted $2.00 to $122.90.

Oil and gas producer Woodside Petroleum firmed three cents at $53.50, and Santos added 29 cents to $14.38.

In the gold sector, Newmont eased two cents to $5.10, Newcrest jumped 76 cents to $34.11, and Lihir found 12 cents at $3.72.

Oceanagold, which is building a gold-copper mine in the Philippines, fell 11 cents to $2.67 as it defended its procedures after a villager was shot during an encounter with a security contractor.

The price of gold at 4.33pm was $US943.50 per fine ounce, down $US9.10 on yesterday's close of $US943.60.

Telco Telstra was steady at $4.38 and its instalment receipts were up three cents at $2.80.

Optus-owner Singapore Telecommunications dipped two cents to $3.10.

In the media sector, News Corp lost 24 cents to $20.77, and its non-voting scrip sagged 30 cents to $20.35.

Consolidated Media retreated three cents to $3.70 and Fairfax backtracked five cents to $3.50.

Among retail stocks, Woolworths was 54 cents heavier at $29.30 and Wesfarmers, which owns Coles, added 66 cents to $39.01.

Among other stocks, troubled Centro Properties Group picked up four cents to 28.5 cents as it said it was working to extend its April 30 deadline to refinance a $2.3 billion debt owed to its Australian lenders.

Drugs developer Pharmaxis fell three cents to $2.24 as it said Australian-made asthma test Aridol had been approved by the International Olympic Committee to be used by athletes in Beijing.

The top-traded stock by volume was Telstra, with 96.4 million shares worth $419.35 million changing hands.

Preliminary national turnover was 1.79 billion shares worth $9.1 billion, with 578 stocks down, 556 up and 339 unchanged.