8:00 PM Sydney – Australian stocks and indexes edged lower on the worries that four largest banks may face another ratings downgrade and retailers ease as the dollar strengthened. Transurban chief executive resigned.

Australian stocks traded lower and failed to hug the positive line in the session ahead of the European Union summit and a possible downgrade of Australian banks.

European leaders are scheduled to meet later in the day in Brussels to discuss ways to ease the debt crisis pain, expedite the restructuring of the Greek debts and also finalize the set up of a permanent bailout fund and its size.

The ASX 200 index decreased 15.7 or 0.4% to 4,272.7 and All Ordinaries index fell 14.1 to 4,334.40.

The Australian dollar edged up above $1.06.

In trading, turnover declined to 1.48 million shares worth $3.43 billion and of the shares traded 433 increased, 510 decreased and 421 closed unchanged.

Fitch Ratings warned that it may cut AA rating of four largest Australian banks because of its heavy reliance on overseas short term funding.

Stock Movers

BHP Billiton Ltd rose 1 cent to $37.67 and Rio Tinto Ltd closed down $0.78 to $69.

Fortescue Metals Group decreased 3 cents to $5.03, Lynas Corporation Limited closed higher 2 cents at $1.31 and Iluka Resources increased $0.18 to $18.88. Newcrest Mining fell 8 cents to $34.32.

Transurban declined 7 cents to $5.50 after the chief executive Chris Lynch resigned.

Oil Search Limited traded down 8 cents to $6.51, Santos Limited closed up 5 cents at $13.53 and Woodside Petroleum decreased 12 cents to $34.36.

Commonwealth Bank of Australia decreased 12 cents to $51.04 and ANZ declined 3 cents to $21.47 and Westpac inched lower 19 cent to $21.10. National Australia Bank fell 17 cents to $23.91.

David Jones Limited increased 8 cent to $2.45 and Wesfarmers Limited decreased 16 cents to $30.17. Harvey Norman Holdings closed up 5 cents $2.05.

Woolworths Limited closed down 32 cents to $24.45 and JB Hi-Fi Limited increased 25 cents to $11.82. Billabong International Ltd closed up 1 cent to $1.90 and Kathmandu closed down 2 cents to $1.20.

Qantas Airways Ltd was flat at $1.60, Virgin Australia closed down 0.5 cent to 31.5 cents and Flight Centre increased 30 cents to $19.42.

QR National closed down 2 cents at $3.67.