Aussie stocks seen dropping on U.S. worries

SYDNEY, Oct 22 (Reuters) - Australian shares are set to
fall sharply on Monday, led by U.S.-exposed firms such as
Westfield Group WDC.AX on fresh worries that the U.S. housing
slump was infecting the wider economy.

Fuelling concerns about health of the U.S. economy,
Caterpillar Inc (CAT.N: Quote, Profile, Research), the world's top maker of earth-moving
equipment, warned that the U.S. housing downturn was spreading
to other parts of the economy [ID:nN19216231].

Those comments sparked a sell-down on Wall Street on
Friday, with the three major U.S. indices all dropping over 2
percent [ID:nN19360713].

On Friday, Australia's benchmark S&P/ASX 200 index
fell 0.9 percent, or 61.4 points, to 6,706.3, after rising 1.3
percent to end a four-session slide in the previous session.

The index fell 0.6 percent on the week, snapping eight
straight weeks of gains. Still, the index has gained 22.3
percent from a 2007 low seen in mid-August and is up 18.3
percent since the start of the year.

The December share price index futures YAPcm1 fell 155
points to 6,591.0 in after-hours trade, a 115.3-point discount
to the underlying index.

New Zealand is closed for a public holiday on Monday. The
benchmark NZX-50 index .NZ50 closed up 0.1 percent, or 3.16
points, at 4,316.31 on Friday.

In Australia, firms with exposure to the U.S. economy,
including Westfield and James Hardie Industries (JHX.AX: Quote, Profile, Research), are
set to fall on renewed fears about the U.S. economy.

Energy firms such as Woodside Petroleum Ltd (WPL.AX: Quote, Profile, Research) may
also decline after oil prices receded on Friday as dealers took
profits from a record rally to over $90 a barrel [ID:nSP56074].

AGL Energy Ltd (AGK.AX: Quote, Profile, Research) may be in focus following a
newspaper report that the head of Australia's largest
electricity retailer has agreed to leave the company following
a meeting with the board on Friday [ID:nSYD90776].

Augur Resources Ltd (AUK.AX: Quote, Profile, Research), a mineral exploration firm,
will make its trading debut along with Bauxite Resources Ltd
(BAU.AX: Quote, Profile, Research), a bauxite exploration company.
($1=A$1.12)
($1=NZ$1.34)