Shares slip to 11-month low in lacklustre trade

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This was published 13 years ago

Shares slip to 11-month low in lacklustre trade

Close Shares fell to an 11-month low in a very quiet trading day, as the market failed to hang on to early gains on the back of several takeover bids.

At the close, the benchmark S&P/ASX200 index was down 16.6 points, or 0.4 per cent at 4222.1 points, while the broader All Ordinaries index lost 14.3 points, or 0.3 per cent, to 4250.6.

Among the major sectors, financials dropped 0.6 per cent, materials lost 0.2 per cent, while energy shares gained 0.9 per cent.

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Macquarie Private Wealth division director Lucinda Chan said the local bourse shed early gains after the Hang Seng and Shanghai markets started trading lower.

‘‘What held the market up better than I thought was the merger and acquisition activity this morning for Centennial and CSR,’’ she said. ‘‘Not having US guidance tonight (because of a holiday), the market was travelling on its own with Asia softer.

‘‘We’ve also turned down by the afternoon despite the fact that we’ve had some good base metal prices and some good amendments coming through for the resources profit tax.’’

Ms Chan said the general market malaise was the result of lacklustre economic data from the US which was discouraging investor expectations over the strength of the global recovery.

Banpu buys Centennial

Thailand's Banpu Public Company made an all-cash takeover bid for Centennial, valuing the company at $6.20 per share, which CMC Markets’ head of trading, James Foulsham, described as a ‘‘massive premium’’.

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The stock surged $1.41, or 31.9 per cent, to $5.83.

CSR’s shares jumped 6 cents, or 3.5 per cent, to $1.755 after the company agreed to sell its sugar and renewable energy business, Sucrogen, to Wilmar International, a Singapore-listed agribusiness group, for $1.75 billion.

Coal miners jumped, with Whitehaven Coal adding 23 cents,or 5.1 per cent, to $4.75 and MacArthur Coal advancing 63 cents, or 5.2 per cent, to $12.75.

‘‘This is a tough market. Investors must have confidence to buy into this market,’’ Ms Chan said.‘‘You look at this market and some of the stocks have to be a screaming buy - they’re so low.’’

Market heavyweight BHP Billiton eased 11 cents to $36.98 while rival Rio Tinto lost 5 cents to $65.25.

Some oil stocks moved into positive territory with Santos gaining 18 cents, or 1.5 per cent, to $12.40.

Gold stocks made marginal gains with Newcrest Mining up 10 cents to $34.34 and Lihir Gold firming 1 cent to $4.21.

Banks drop

Most financials lost ground. National Australia Bank fell 34 cents, or 1.5 per cent, to $22.72, Westpac shed 17 cents to $20.79 and Suncorp-Metway fell 20 cents, or 2.5 per cent, to $7.75.

But ANZ edged 3 cents higher to $20.89 and Commonwealth Bank of Australia added 6 cents to $47.79.

Consumer staples Woolworths and Wesfarmers lost ground. Grocer Woolworths fell 27 cents, or 1 per cent, to $26.37 while Wesfarmers lost 44 cents, or 1.6 per cent, to $27.69.

Major media stocks lost over 1 per cent, with Consolidated Media down six cents, or 1.9 per cent, to $3.08.

Fairfax Media fell 2.5 cents, or 1.9 per cent, to $1.33, News Corp lost 16 cents, or 1 per cent, to $15.91 and its non-voting scrip eased 5 cents to $14.12.

Elders compliance eyed

Agribusiness Elders said the Australian Securities and Investments Commission (ASIC) is investigating its compliance with continuous disclosure obligations leading up to a profit downgrade on June 22.

Elders’ shares gained 4 cents, or 10.5 per cent, to 42 cents.

In the resources sector, Heemskirk Consolidated outbid Conquest Mining with an $84 million scrip offer for North Queensland Metals. Heemskirk fell 4.5 cents, or 12.9 per cent, at 30.5 cents, and North Queensland Metals was up 6.5 cents, or 24.1 per cent, at 33.5 cents.

Centennial Coal was the top traded stock by volume, with 54.5 million shares traded for $320.4 million.

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National turnover reached 1.18 billion shares, worth $3.28 billion, with 430 stocks up, 475 down and 321 unchanged.

AAP with BusinessDay

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