Australia shares see biggest one-day drop in 7 weeks on U.S. fiscal crisis

(Adds analysis, quotes, stocks on the move)

SYDNEY, Sept 30 (Reuters) - Australian shares slid 1.3 percent from five-year highs on Monday, their biggest one-day drop since early August, after Wall Street fell on concerns over looming fiscal deadlines.

The Big Four banks lost ground in a broadbased sell-off. Westpac Banking Corp lost 1.5 percent while Australia and New Zealand Banking Group dropped 1.6 percent.

Analysts said that despite a fall in the session, the banks were trading close to fair-value estimates, driven by growing profits and dividends.

The S&P/ASX 200 index fell 70.4 points to 5,236.7 by 0155 GMT, its biggest one-day fall since August 7. The benchmark edged 0.2 percent higher on Friday to hit a five-year high.

The local bourse took its lead from U.S. stocks, which declined on Friday, with the S&P 500 and Dow posting their first weekly drop in four, as Democrat and Republican lawmakers struggled to agree an emergency funding bill to avert a U.S. government shutdown that could start on Tuesday.

President Barack Obama warned the U.S. Congress against a government shutdown as lawmakers wrangled over the bill that some Republicans want to use to defund Obama's healthcare reform law.

A handful of defensives also lost ground with blood products maker CSL Ltd tumbled 1.6 percent and top telecommunications giant Telstra Corporation Ltd shed 0.7 percent. Consumer staples retailer Wesfarmers Ltd lost 1.1 percent.

However, a lift of around 1 percent in gold prices helped cap broader losses as investors sought safe-havens, driven by a possible shutdown of U.S. government operations. Newcrest Mining Ltd climbed 1.7 percent while Medusa Mining Ltd rallied 2.5 percent.

"The Australian and New Zealand share market is trading around fair value following recent strong gains," said Andrew Doherty, head of equities at research investment firm Morningstar, in a note to clients.

"The Australian economy is softening but the platform is in place for mild recovery during 2014, helped by low interest rates and improving consumer confidence."

Elsewhere, China's factory sector grew in September, suggesting Asia's economic powerhouse is starting to turn the corner, though a firm rebound remains elusive, further dampening sentiment on the local benchmark index.

OZ Minerals Ltd jumped 3 percent to A$4.54, but fell from early highs as the copper miner said it had not been approached by Glencore Xstrata with any proposal after a British newspaper said Glencore was weighing a 750 million pound ($1.2 billion) bid.

Mirabela Nickel Ltd slumped 28 percent to all-time lows of A$0.02 after credit ratings agency Moody's placed its CAA1 rating on review for a downgrade and after the company said its sales agreement with Votorantim will terminate at the end of November.

New Zealand's benchmark NZX 50 index fell 0.8 percent or 37.5 points to 4,745.2.

(Reporting by Thuy Ong; Editing by Eric Meijer)

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Rainbow rebellion in Australia after "gay" crossing torn up

A pedestrian walks across a rainbow pedestrian crossing painted on Sydney's Oxford street, the city's main gay district April 4, 2013.

Credit: Reuters/David Gray

By Michael Sin

SYDNEY | Tue Apr 16, 2013 10:39pm EDT

SYDNEY (Reuters) - Australians have taken to the streets to create rainbows with colorful chalk in protest after a rainbow pedestrian crossing in Sydney's main gay district was removed as a safety hazard, despite calls to retain it as a statement of gay pride.

Sydney's annual Mardi Gras gay pride celebration is one of Australia's biggest tourist draws, and the colorful stripes on Oxford Street were originally painted to recognize the 35th anniversary of the event in March for a one-month trial period.

But the crossing, which became something of a tourist magnet, was removed on April 11 despite a petition drive that netted 15,000 signatures and the support of people like former tennis star Martina Navratilova.

State officials said the crossing was dangerous, citing CCTV footage showing people lying down on the road to take photos.

In response, James Brechney, 29, chalked a rainbow crossing in the laneway outside his home and posted a photo on Facebook.

Now his "DIY Rainbow Crossings" page has garnered over 17,000 likes in under a week and prompted the chalking of similar rainbows on streets all across Australia and as far away as France, the United States and Germany. One woman posted a photo of a rainbow chalked on her legs.

"It was a celebration of the short-lived crossing that we had in Sydney and I'm just so thrilled it's taken off globally," Brechney said.

A YouTube video was even posted of men chalking rainbow stripes in front of the office of Duncan Gay, the roads minister in New South Wales state.

Gay said he was more than willing to take the criticism, but that the chalked rainbows themselves were potentially dangerous.

"Please be very careful where you place these crossings because a young child might be injured or even killed," he said.

But the movement appears set to continue, with calls for rainbow chalkings outside parliament in New Zealand, which is expected to pass a marriage equality bill later on Wednesday.

"Our chalk rainbows have overridden the memory of seeing that big ugly machine scraping off our Oxford Street rainbow," wrote one post on Facebook. "Let's keep our voice loud and beautiful - the world needs a lot of this right now."

(Reporting by Michael Sin; Editing by Elaine Lies)

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