AUSTRALIAN shares opened slightly lower today after a sharp fall in commodity prices overshadowed solid gains in Western markets. The benchmark S&P/ASX 200 index was down 22.2 points (0.6 per cent) at 3978.9 in the first 15 minutes of trading, led by falls in BHP Billiton, Rio Tinto, Newcrest Mining and Lihir Gold. The softer mining sector came after copper, gold and other commodity prices fell sharply overnight. Oil also slipped on concerns about slowing demand. The broader All Ordinaries was down 18.1 points at 3939.2. Copper - seen as a real gauge of economic activity - slumped more than 10 per cent. At the same time, gold futures for December delivery fell 2 per cent after the US economy shrank at a 0.3 per cent annual rate in the third quarter, as consumer spending slumped. Investors are worried that a US recession will reduce demand for raw materials and put further pressure on prices. BHP was down 84 cents (2.9 per cent) at $27.76, Rio was lower by $1.14 (1.5 per cent) at $76.18, Newcrest Mining was down 43c (2.1 per cent) at $20.09 and Lihir Gold was off nearly 8.5c (4.2 per cent) at $1.97. US shares strengthened overnight on hopes that the Federal Reserve’s sixth interest rate cut this year would rescue the economy from a deep recession. Investors also took comfort from signs that credit markets were thawing, as well as the GDP data, which showed that the contraction in the US economy had been less severe than forecast. The Dow Jones Industrial Average rose 189.73 points, or 2.11 per cent, to 9180.69, its highest close since October 20. The Standard & Poor's 500 rose 24 points (2.58 per cent) to 954.09. The tech-heavy Nasdaq added 41.31 points (2.49 per cent) to 1698.52 for its third straight increase.

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