THE Australian sharemarket closed 1.2 percent lower today after weakness among the big banks and global miner BHP Billiton. The benchmark S&P/ASX200 index also followed a negative lead from the United States markets and was down 43.3 points, or 1.22 per cent, at 3,497.4 while the broader All Ordinaries index fell 34.6 points, or 0.99 per cent, to 3443.5. On the Sydney Futures Exchange, the March share price index futures contract was 33 points lower at 3,460 on a volume of 18,847 contracts, according to preliminary calculations. ABN Amro Morgans private client adviser Peter Knight said there were a number of factors affecting the market today. “You’ve got (miner) Rio (Tinto) up based on talks with Chinalco so that’s driving a bit of the market, and there’s some general weakness throughout the banks, but nothing too drastic,” Mr Knight said. “Obviously all the leads we had on Friday were a bit negative, and BHP’s down too, so that’s what is doing the damage today.” In the resources sector, Rio Tinto jumped $2.30, or 5.46 per cent, to $44.45, after it confirmed talks with major shareholder Chinalco about a capital injection and asset sales as the company works to reduce its debt. BHP Billiton fell 50c to $30. Fortescue Metals surged 18 cents, or 10.17 per cent, to $1.95. Oil and gas producer Woodside Petroleum eased three cents to $35.35, and Santos retreated 18 cents to $14.19. Among gold stocks, Newcrest said it plans to raise $500 million to repay debt and to fund expansion and potential acquisitions. Newcrest was in a trading halt and last traded at $31. Lihir lifted two cents to $3.15, and Newmont rose 20 cents to $6.39. The price of gold in Sydney at 1620 AEDT was $US913.50 per fine ounce, up $US7.70 on Friday's close of $US905.80. Among the major banks, National Australia Bank lost 22c to $18.71, Westpac sagged 33c to $15.31, Commonwealth Bank surrendered 45c to $26.45, and ANZ scraped off one cent to $13.26. On Wall Street on Friday, the Dow Jones Industrial Average index lost 148.15 points, or 1.82 per cent, to 8,001.86, after the government reported that the US economy contracted in the fourth quarter at an annual rate of 3.8 per cent - the sharpest fall in 26 years. In the media sector, Prime Media Group was steady at $1.05 as it predicted a 19 per cent decline in first half earnings due to the impact of deteriorating market conditions. News Corp dumped 86c to $11.15, while its non-voting scrip ejected 89c to $9.90. Consolidated Media was off 13c at $1.80, and Fairfax shed 8.5c to $1.32. Telco Telstra stepped back 6c to $3.73, and Optus-owner Singapore telecommunications slipped 5c to $2.73. Retailer Woolworths descended 55c to $27.15, and Wesfarmers, which owns Coles, back-tracked 31c to $15.24. Share market investor Argo Investments was 20c richer at $5.29 despite posting a fall in interim net profit and saying the global credit crisis would place pressure on company profits in the period ahead. Online gaming firm International All Sports (IAS) gained 11c, or 68.75 per cent, to 27c after rival Centrebet International made a takeover bid for it at a minimum $18.59 million and up to $29.91 million. Centrebet last traded at $1.34. Property owner and developer Stockland was steady at $3.64 after it sold three commercial office buildings for $95.1 million and below book value. The top-traded stock by volume was Macquarie Office Trust, with 34.43 million shares worth $6.95 million changing hands. Preliminary national turnover was 917.8 million shares worth $2.56 billion, with 325 stocks up, 504 down and 265 unchanged.

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