I described the May 16 action on the Australian Securities Exchange (ASX) as a “day of days” in a Down Under Digest published stateside well after the close in Sydney, as up to then it was the biggest single-session decline for the S&P/ASX 200 Index in 2012.

That 2.4 percent decline was eclipsed today, as the major benchmark for Australian stocks shed another 2.7 percent. The main drivers of this latest round of selling were intensifying funding pressures for Australian banks because of what’s happening in Spain and deteriorating hopes for a clean resolution of the Greece problem.

My major takeaway from today’s action is that Telstra Corp Ltd (ASX: TLS, OTC: TTRAF, ADR: TLSYY), one of the best growth-plus-income stories on the planet, is now back within buying range, as is fellow “Income Wonder from Down Under” GrainCorp Ltd (ASX: GNC, OTC: GRCLF), which has posted a 35.6 percent total return in US dollar terms since Australian Edge debuted in September but had run well past its USD9 buy-under target.

Mike Smith, CEO of Conservative Holding Australia & New Zealand Banking Group Ltd (ASX: ANZ, OTC: ANEWF, ADR: ANZBY), said earlier today that global funding markets for Australian banks had “frozen” because of financial turmoil emanating from Europe.

“Right now, markets are closed again, and this is what happens in this sort of situation,” Mr. Smith said after a speech to a business group, according to the Sydney Morning Herald. ANZ is down 12.8 percent in May, placing it among the bottom 10 performers of the top 50 stocks by market capitalization on the ASX.

In a later statement released by ANZ Mr. Smith provided more nuance, noting, “European funding markets are essentially closed at the moment because of the uncertainty in Europe however Asian and US markets remain open.

While we will see volatility as the European crisis unfolds, the situation is more manageable than 2008 when we had the shock collapse of Lehman’s and Australian banks are well placed right now.”

According to Mr. Smith, ANZ has already completed its 2012 funding. He also noted that his bank has had two years to anticipate and plan for the scenario unfolding in Greece and southern Europe.

“It’s difficult to say what it will mean for funding costs but we need to bear in mind recent pressures have been caused by the cost of domestic deposits and that won’t change anytime soon,”Mr. Smith said in the statement released by the bank.

ANZ declined 3.4 percent today on the ASX to close at AUD20.84, about USD20.58 based on the Australian dollar-US dollar exchange rate as of this writing, which is USD0.9877. That puts the stock well within our buy-under target of USD24 and prices Australia & New Zealand Banking Group to yield nearly 7 percent.

Fellow Conservative Holding Telstra Corp Ltd (ASX: TLS, OTC: TTRAF, ADR: TLSYY) showed some of its defensive character by shedding just 1.7 percent, outperforming the broader market, but the stock closed on a downtick to its low for the day. This action, however, in addition to the recent weakness of the aussie versus the buck, has brought the highest of high-quality dividend payers Down Under back under our buy target of USD3.50. The stock is now priced to yield nearly 8 percent. And the dividend is safeguarded by the estimated AUD11 billion Telstra will receive from Australia’s National Broadband Network (NBN) over the next several years.

Telstra Corp is a strong buy under USD3.50 on the ASX or using the US over-the-counter symbol TTRAF. Buy the US-listed American Depositary Receipt (ADR), which is worth five ordinary shares, under USD17.50.

AGL Energy Ltd (ASX: AGK, OTC: AGLNF, ADR: AGLNY), which was one of the few Australian listings to post green numbers on Wednesday, May 18, shed 0.4 percent today but rallied 0.8 percent off its intraday low throughout the day. It was another standout performance amid the carnage for what, too, is a high-quality dividend payer.

Electricity and gas distributor AGL Energy, which has grown its dividend rate by more than 44 percent over the past five years and is now priced to yielding 4.1 percent, is a buy under USD16.

APA Group (ASX: APA, OTC: APAJF), like ANZ and AGL an original member of the AE Portfolio, closed down 2 percent at its low for the day. Investors may be pricing in a higher bid for Hastings Diversified Utilities Fund (ASX: HDF), the takeover of which is now becoming a bidding war. A rival consortium comprised of a Canadian pension fund manager and an Australian investment firm has offered AUD2.35 per share in cash for Hastings.

Though APA certainly has the financial muscle to trump the bid, to date management has exercised good discipline in sticking to its original shares-plus-cash offer that values the target at about AUD2.11. The Australian Competition and Consumer Commission (ACCC) is slated to rule on APA’s attempt at Hastings on Jun. 21, 2012.

APA Group, yielding 7 percent-plus on the ASX and the US over-the-counter (OTC) market, is a strong buy up to USD5.50.

Australand Property Group (ASX: ALZ, OTC: AUAOF) actually traded up to AUD2.68 from a May 17 close of AUD2.67 early Friday in Sydney before the stock succumbed to the selling pressure. It ended the day down 3 percent at AUD2.59, closing at its session low.

The stock had posted a nearly 4 percent gain in price-only terms on the ASX from our original recommendation date of Mar. 16, 2012, through Thursday’s close. Now yielding 8.3 percent Australand Property Group is a buy under USD2.80.

Cardno Ltd (ASX: CDD, OTC: COLDF), which has enjoyed a solid run since we first recommended it in the November 2011 issue of AE, outperformed broad benchmarks during Wednesday’s selloff and repeated the feat Friday, losing 1.3 percent to close at AUD7.00.

The fast-growing engineering consultant with operations all over the world has posted a 33 percent return in US dollar terms since Nov. 11, 2011. Cardno, now yielding about 5 percent, is back below our buy-under target of USD7.

CSL Ltd (ASX: CSL, OTC: CMXHF, ADR: CMXHY), as you would expect of a stock from the traditionally defensive health care sector, held up relatively well Friday, losing 0.7 percent. For context, the stock has returned about 17 percent since our Oct. 14, 2011, original recommendation. The S&P/ASX 200 Index is off about 5 percent in US dollar terms during that timeframe, while the S&P 500 Index is up about 8 percent through May 17 trading.

The stock has held up well during this brutal May on the Australian Securities Exchange, posting a 0.3 percent decline against an 8 percent price-only decline for the benchmark S&P/ASX 200 Index. Its AUD36.55 May 18 close on the ASX, factoring in the prevailing aussie-buck exchange rate (USD36.06), still leaves it above our buy-under target of USD35.

Envestra Ltd (ASX: ENV, OTC: EVSRF) lost a penny in today’s trade, but that translates to a 1.3 percent decline for a stock that’s trading right at its USD0.80 buy-under target. This owner/operator of natural gas transmission pipelines and distributions networks yields a solid 7.4 percent. It’s a strong buy anytime it trades below USD0.80.

M2 Telecommunications Group Ltd (ASX: MTU, OTC: MTCZF) shed 2.5 percent today, following Wednesday’s 1.6 percent decline. Both figures are better than what the main benchmark turned in during this week’s major selloff sessions.

Since we added it to the Conservative Holdings on Dec. 16, 2011, the stock has generated a US dollar return of 13.7 percent. The S&P/ASX 200 Index is off 1.5 percent during this time, while the S&P 500 Index is up 8 percent. The stock, with a current yield of 5.5 percent, closed today at USD3.10 on the ASX, still above our buy-under target of USD3.

Wrapping up the Conservative Holdings, Transurban Group (ASX: TCL, OTC: TRAUF) was once again one of the strongest stocks on the entire Australian Securities Exchange. On Wednesday, when the S&P/ASX 200 Index shed 2.4 percent, Transurban was down just 0.8 percent. Today, against a loss of 2.7 percent for the broad benchmark, Transurban lost 0.5 percent.

That’s testament to the cash-generating quality of its toll road assets in Australia and the US that will serve during good economic times and bad. Yielding 4.9 percent–and priced below target–Transurban Group is a strong buy up to USD6.

March Portfolio addition Iluka Resources Ltd (ASX: ILU, OTC: ILKAF, ADR: ILKAY), which has issued two recent fiscal 2012 output downgrades for its key growth-driver zircon, is an object lesson in what can happen to stocks that have provided recent disappointment to the market when selling becomes indiscriminate.

Despite the fact that management expressed confidence in medium-term demand fundamentals for its key zircon and titanium dioxide outputs during a presentation to the Bank of America Merrill Lynch Global Mining, Metals and Steel conference in Miami on May 16, the recent downward revisions to production forecasts weighed even heavier on this stock as it plunged an additional 6.9 percent May 18 in Sydney. It closed at AUD12.18, very well within our buy-under target of USD16.

Now priced to yield more than 6 percent, Iluka Resources is a play only for the very aggressive among you who appreciate the medium- and long-term story and can tolerate substantial volatility.

The world’s No. 3 gold producer and an October 2011 addition to the Aggressive Holdings, Newcrest Mining Ltd (ASX: NCM, OTC: NCMGF, ADR: NCMGY) has been a disappointment since joining the AE Portfolio. But on Friday, as fear drove investors to assets perceived to be safe, the gold producer surged 3.8 percent to post one of the few end-of-day green numbers on the ASX, actually posting the fourth-best performance among S&P/ASX 200 Index members.

This is a positive step toward fulfilling the promise we discussed in the May Portfolio Update and reiterated in this week’s Down Under Digest: “[W]e can win from either recovering gold prices, an improvement in the mining stock/gold performance spread and/or improved results at Lihir.” Newcrest Mining–which provides exposure to gold and pays a 1.3 percent yield at these levels–is a buy under USD32.

BHP Billiton Ltd (ASX: BHP, NYSE: BHP) and the company with which it’s often linked, Rio Tinto Ltd (ASX: RIO, NYSE: RIO), again sold off hard on Friday, BHP shedding another 4 percent to match Wednesday’s performance, Rio dropping an unseemly 5.1 percent in the wake of a 3.8 percent loss two days ago.

This is all about concern for global growth in the face of deteriorating financial conditions on the Iberian Peninsula–Moody’s Investor Service downgraded 16 Spanish banks after the close of trading in Europe Thursday–and continuing turmoil surrounding the Greek political situation.

These companies remain well place to benefit from a return to something like normal conditions–even the “new” normal–for global growth, which will be led by Asian economies transitioning to domestic demand-led models. BHP remains a buy under USD40, while Rio Tinto is a buy under USD75.

An original member of the Portfolio, GrainCorp Ltd (ASX: GNC, OTC: GRCLF) has posted a 35.6 percent total return in US dollar terms since the Sept. 26, 2011, debut of Australian Edge. The S&P/ASX 200 Index is up 9.4 percent for the comparable period, while the S&P 500 Index is up 13.9 percent through May 17.

What the stock’s 2.9 percent decline on Wednesday and 2.8 percent decline on Friday mean is that it’s now back within buying range. GrainCorp, the biggest grain-handler in Australia and well positioned to serve rising and maturing appetites in Asia, closed at AUD8.77 on the ASX Friday, which is about USD8.65 as of this morning.

Now yielding 3.4 percent, GrainCorp is a strong buy under USD9.

Mineral Resources Ltd (ASX: MIN, OTC: MALRF, ADR: MALRY) bounced off a gap-down open, rallying 3 percent from its intraday low to post a loss of 4.5 percent. That follows Wednesday’s 1.9 percent loss. The mining services company with an iron ore mining operation attached to it will rise and fall, like BHP and Rio, as perceptions about global growth wax and wane. The stock, now yielding well north of 4 percent, remains a buy under USD13.

New Hope Corp Ltd (ASX: NHC, OTC: NHPEF) sold off hard well before this latest frenzy of fear took hold; in other words, in situations like Friday panicked investors sell what they can. It therefore looked relatively good on Wednesday, when it lost 2 percent versus the 2.4 percent loss for the broad benchmark, and Friday, when it was down 1.4 percent versus 2.7 percent for the S&P/ASX 200 Index.

This week’s action has taken the stock down to AUD4.20 on the ASX, where it yields 2.6 percent. Its thermal coal and export terminal still leave it in good stead vis a vis strong demand for electricity in India. New Hope is a buy for particularly aggressive investors under USD6.

Oil Search (ASX: OSH, OTC: OISHF, ADR: OISHY) bounced nicely off its early session low of AUD6.50 to close at AUD6.59, down 2.4 percent on the day. This follows a 1.7 percent decline on Wednesday. The company’s key PNG LNG project continues to meet significant benchmarks, on time and on budget. It’s a buy under USD8.

Integrated energy company Origin Energy Ltd (ASX: ORG, OTC: OGFGF, ADR: OGFGY) looked relatively good Wednesday and Friday, losing 1.7 percent and 1.5 percent, respectively, but closing off its low for the latter session. Origin Energy remains a buy under USD15.

WorleyParsons Ltd (ASX: WOR, OTC: WYGPF, ADR: WYGPY) is tightly tied to what happens with global energy demand and development; it may rightly be described as ExxonMobil’s (NYSE: XOM) go-to engineer, with key roles in significant projects from offshore Canada to Papua New Guinea.

The company is also doing significant work in the Canadian oil sands, with literally thousands of engineers working the tailings pond problem and how to reclaim water for the Syncrude venture.

The stock is down significantly from where it traded when we added it to the AE Portfolio in February following a 3.2 percent decline on Wednesday and a 1.8 percent loss on Friday. But it did gain 1 percent off its early intraday low, an indication that at least some investors appreciate the key role it plays and will play in getting energy to market. Worley Parsons is a buy for aggressive investors under USD30.

Look for a review of Aggressive Holding GrainCorp Ltd (ASX: GNC, OTC: GRCLF) in next week’s issue of Down Under Digest.

Conservative Holdings

• AGL Energy Ltd (ASX: AGK, OTC: AGLNF, ADR: AGLNY)–Aug. 22, 2012 (estimate, FY 2012, end Jun. 30, 2012)
• APA Group (ASX: APA, OTC: APAJF)–Aug. 21, 2012 (estimate, FY 2012, end Jun. 30, 2012)
• Australand Property Group Ltd (ASX: ALZ, OTC: AUAOF)–Jul. 26, 2012 (confirmed, CY/FY 2012 1H, end Jun. 30, 2012)
• Australia & New Zealand Banking Group Ltd (ASX: ANZ, OTC: ANEWF, ADR: ANZBY)–May 2 Down Under Digest
• Cardno Ltd (ASX: CDD, OTC: COLDF)–Aug. 16, 2012 (estimate, FY 2012, end Jun. 30, 2012)
• CSL Ltd (ASX: CSL, OTC: CMXHF, ADR: CMXHY)–Aug. 21, 2012 (confirmed, FY 2012, end Jun. 30, 2012)
• Envestra Ltd (ASX: ENV, OTC: EVSRF)–Aug. 27, 2012 (estimate, FY 2012, end Jun. 30, 2012)
• M2 Telecommunications Group Ltd (ASX: MTU, OTC: MTCZF)–Aug. 29, 2012 (estimate, FY 2012, end Jun. 30, 2012)
• Telstra Corp Ltd (ASX: TLS, OTC: TTRAF, ADR: TLSYY)–Aug. 9, 2012 (confirmed, FY 2012, end Jun. 30, 2012)
• Transurban Group (ASX: TCL, OTC: TRAUF)–Aug. 2, 2012 (confirmed, FY 2012, end Jun. 30, 2012)

Aggressive Holdings

• BHP Billiton Ltd (ASX: BHP, NYSE: BHP)–Aug. 22, 2012 (confirmed, FY 2012, end Jun. 30, 2012)
• GrainCorp Ltd (ASX: GNC, OTC: GRCLF)–May 22, 2012 (confirmed, FY 2012 1H, end Mar. 30, 2012)
• Iluka Resources Ltd (ASX: ILU, OTC: ILKAF, ADR: ILKAY)–Aug. 23, 2012 (confirmed, FY 2012 1H, end Jun. 30, 2012)
• Mineral Resources Ltd (ASX: MIN, OTC: MALRF)–Aug. 20, 2012 (estimate, FY 2012, end Jun. 30, 2012)
• Newcrest Mining Ltd (ASX: NCM, OTC: NCMGF, ADR: NCMGY)–Aug. 13, 2012 (confirmed, FY 2012, end Jun. 30, 2012)
• New Hope Corp Ltd (ASX: NHC, OTC: NHPEF)–Sept. 20, 2012 (estimate, FY 2012, end Jul. 31, 2012)
• Oil Search Ltd (ASX: OSH, OTC: OISHF, ADR: OISHY)–Jul. 24, 2012 (confirmed, FY 2012 1H, end Jun. 30, 2012)
• Origin Energy Ltd (ASX: ORG, OTC: OGFGF, ADR: OGFGY)–Aug. 23, 2012 (estimate, FY 2012, end Jun. 30, 2012)
• Rio Tinto Ltd (ASX: RIO, NYSE: RIO)–Aug. 8, 2012 (confirmed, FY 2012 1H, end Jun. 30, 2012)
• WorleyParsons Ltd (ASX: WOR, OTC: WYGPF, ADR: WYGPY)–Aug. 29, 2012 (estimate, FY 2012, end Jun. 30, 2012)