10:00AM New York, 1:00AM+ Sydney - Global recession fears haunt stocks in Australia. Precious metals and aluminum prices declined.

Australian stocks closed lower on the mounting evidence that the U.S. economy may be heading from a slowdown to a recession.

The U.S. weekly unemployment claims at the end of last week rose to 497,000, auto sales in Sept month fell to a 15-year low and dropped more than 25% from a year ago and revised bailout plan of $700 billion will largely wasted and not solve the current economic malaise.

Platinum and palladium prices dropped to sixteen months low and exporters of coal, iron ore and explosives makers declined. BHP Billiton, Rio Tinto Group and McArthur Coal dropped to their lows last seen in May of 2007.

Market Sentiment

In Sydney trading ASX 200 fell 1.38% or 65.7 to 4,695.40.

Of the ASX 200 index stocks 58 gained, 132 declined, and 10 were unchanged. Great Southern Ltd. led advancers in the index shares with a rise of 7.61%.

U.S. Unemployment Claims Rise

The U.S. Labor Department reported on its Web site yesterday that the number of initial jobless claims increased by 1,000 from the previous week to 497,000 in the week ending September 27.

According to the department, Hurricane Gustav in Louisiana and Hurricane Ike in Texas contributed an estimated 45,000 claims to the total.

Also the 4-week moving average rose 11,500 to 474,000 from an unrevised average of 462,500 a week earlier.

Stockland Forecasts Inventory Writedowns of $50 million

Stockland Corporation Limited, the largest property developer and investment group in Australia in a filing to the ASX that the company will write down its UK inventory of property portfolio and also take a goodwill impairment charge.

The UK business is expected to break even compared to earlier projection of $20 million in profit in the fiscal 09. The UK operations represent 5% of the asset base of the company.

Stockland Managing Director Matthew Quinn commented: “Conditions in the UK have significantly deteriorated over the past two months with a sharp fall in confidence, economic conditions and property values. It is now widely predicted that the UK is heading for a recession. Accordingly, we have reviewed the FY09 UK business plan and profit forecast and the carrying value of our UK property assets.”

The company expects to write down its portfolio of properties held for investment or trading by A$50 million after tax and UK business goodwill impairment charge of A$60 million at the end of December 2008.

Stockland entered Australia in May of 2007, at the height of the housing market bubble in the UK. Stockland stock declined 2.4% or 14 cents to A$5.66 and has fallen nearly 40% $8.10.

Australian Dollar Drops

The Australian dollar fell the most since 1985 against the U.S. dollar. One Aussie dollar bought 77.89 American cents on fears that the global economy may slip from a slowdown to a recession.

Gainers & Losers