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Aussie shares were down Tuesday morning, with the market hit by profit-taking following strong gains yesterday, combined with cooling enthusiasm over the revalued Chinese yuan and a soft lead from Wall Street. The mid-cap miners were the weakest, while the banks also trended lower.

At lunch, the All Ords lost 16.9 to 4,615.8, while the ASX/200 dipped 16.4 to 4,596.2. Around 970 million shares worth around $2.3 billion had changed hands.

Telstra, which rallied strongly yesterday following the securing of an $11 billion NBN deal with the Australian government, lost 4c to $3.30 as investors booked profits. The broader Telecommunications sector was down 1.2%.

Elsewhere, BHP Billiton and Rio Tinto added just 5c and 12c to $39.96 and $72.46 respectively.

However, that was considerably more subdued than their London listings, which were around 5% higher, however in Australia the companies said they had agreed to up their royalty payments to the West Australian government.

Gold stocks were weaker, with Lihir Gold and Newcrest Mining down 1.6% and 1.8% respectively.

Fortescue lost 4c to $4.53, while Macarthur Coal was down 18c to $12.58. OZ Minerals eased 2c lower to $1.05.

Mirabela Nickel slumped 9c to $2.24.

Elsewhere, chemical makers Nufarm and Incitec Pivot shed 3.5% and 3.2% respectively.

The broader Materials and Resources sector was down 0.3%.

The Energy sector was more mixed and was down 0.7% through to lunch.

Origin, Santos and Oil Search weakened 1.1%, 2.1% and 0.8% respectively.

Losses were capped by the coal miners, with New Hope and Whitehaven adding 1.1% and 0.8% respectively.

Woodside, the sector’s largest stock, was barely moved.

The big four banks were marginally lower. NAB and ANZ were just a few cents below the line, while Westpac lost 17c to be at $23.67

CBA gave up 27c, or 0.5% to $53.01, while investment bank Macquarie lost 56c, or 1.2% to $44.36.

The insurers were mixed. AMP retreated 6c to $5.59, while QBE put on 11c to $19.07.

Elsewhere, Challenger Financial Services Group jumped 10c to $3.58 as it continues its share buy-back program.

The Banks and Financials sector was 0.2% weaker.

The Property Trusts sector outperformed the market, taking positive cues from international peers who benefited from the revalued yuan. It rose 1%

Westfield added 17c to $12.94. GPT, Mirvac and Stockland rose 1.4%, 1.1% and 0.7% respectively.

The Industrials sector was 0.7% lower.

Among transport and logistics stocks, Asciano gained 0.6% to $1.70, while Toll lost 13c, or 2.2% to $5.83.

Brambles continued to trade lower, down 8c to $5.81.

Engineering firm UGL lost 17c to $13.82.

Transfield Services retreated 9c to $3.27, despite announcing up to $200 million in new work.

Mining support companies Monadelphous and Boart Longyear were between 1.1% and 1.3% lower.

Consumer Discretionary stocks, particularly the retailers, were 0.9% weaker, with the cost of goods expected to increase for Aussie companies as the Chinese yuan revalues.

JB Hi-Fi and Harvey Norman retreated 68c and 6c to $19.70 and $3.49 respectively. Billabong lost 21c to $9.17.

Myer bucked a broader trend, adding 6c to $3.31.

Gaming machines maker Aristocrat lost 10c to $3.86 after a broker downgrade this morning.

Among the media plays, Newscorp retreated 34c to $17.95.

In the Consumer Staples sector, the major mover was Elders, which tumbled 41.5% after saying it was expecting a loss, from a previously forecast profit of $55 million.

The slump from Elders only had a small impact on the broader sector however, which was down 0.5%.

Wesfarmers, Coca-Cola and Foster's were down between 0.7% and 0.9%.

Around the region, the Nikkei 225 retreated 54.9 to 10,183.1, while the NZSE50 sank 11.8 to 3,056.5. The Straits times Index gave up 2.2 to 2,883.4.

Spot gold was trading at US$1,239.20 per ounce, while the Aussie was buying US$0.8798.

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Elders faces grim future
Elders shares tumbled over 40% Tuesday morning after the beleaguered rural services company downgraded its full-year profit guidance from a $55m profit to a loss of between $8m and $14m. The company said the collapse in earnings was due to a slump in revenue as farmers moved to generic, cheaper brands, compounded by the previous downgrade to MIS sales.

At noon, Elders shares were down 33c to 49c.

BHP and Rio agree to higher iron ore royalties.
BHP Billiton and Rio Tinto have reached a royalty agreement with the Western Australian government to amend iron ore rates payable to the State effective 1 July 2010. The two mining giants have agreed royalty rates would increase from 3.75% of sales revenue to 5.625% for Fines and from 3.25% to 5.0% for Beneficiated Ore.

At lunch, BHP Billiton shares were up 17c to $40.08, while Rio Tinto shares were up 43c to $72.77.

Transfield picks up $200m in new work
Transfield Services updated the market this morning, saying it had picked up more than $200m in new work across its international businesses. Some of the work has come from the Gulf of Mexico oil spill disaster, with US subsidiary TIMEC providing specialist services to work on oil-spill clean-up activities in the gulf.

At midday, Transfield shares were down 8c to $3.28.

GUD completes $40m placement
GUD Holdings announced the successful completion of its $40m fully underwritten Institutional Placement as it prepares to fund the proposed acquisition of Dexion. The company said the placement was oversubscribed with demand from both existing and new Australian and international institutional investors.

At lunchtime, GUD shares were down 15c to $8.50

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