Miners drag the market lower
Commodity stocks dragged the Australian market lower Tuesday morning after the broader indices reached 16-month highs yesterday. Most sectors fell below the line as investors looked to lock in profits made recently.
On Wall Street overnight, the Dow finished 0.4% higher, while the S&P 500 and NASDAQ were relatively flat. Europe was also little changed.
At midday, the All Ords was down 27.2 to 4,954.0, while the ASX/200 shed 28.8 to 4,921.9. About 1 billion shares worth around $1.5 billion had changed hands.
The major players in the Materials and Resources sector weakened despite the base metals rising on the LME on the back of strong Chinese import data and a weak dollar.
BHP Billiton slid 79c to $43.68 and Rio Tinto lost 95 to $79.05.
The sector fell 1.3%.
Alumina shares dropped 9.5c, or 4.6% to $1.965. The company’s AWC joint venture partner Alcoa kicked off the quarterly reporting season this morning by reporting a loss of US$277 million following one off items of US$275 million. Alcoa said revenues were up 18% versus the previous corresponding period, while the company reported a loss from continuing operations of US$929 million a year ago.
Steelmakers Onesteel and Bluescope fell 1.9% and 2.4% to $3.57 and $3.22 respectively.
Gold futures hit their highest level in a month as Newcrest edged 31c higher to $37.13, while Lihir shed 3c to $3.43.
Home builders James Hardie and Fletcher Building were among the better performers, up 13c and 12c to $8.68 and $6.78.
Energy stocks were mainly lower, sending the sector 0.6% into the red. Major players Woodside, Oil Search and Coal & Allied were between 0.7% and 0.9% below the line.
Uranium miner Paladin fell 3.6% to $4.25, while coal and iron ore explore Aquila put on 17c to $11.32.
The Banks and Financials sector slipped 0.2% with the large majority of shares failing to move far from the gain line.
CBA was the best of the big four banks, gaining 35c to $56.92, while NAB was the worst performer, down 22c to $27.03.
Macquarie Group was slightly lower at $48.76 as the investment bank, alongside Canadian Pension Plan Investment Board and the Abu Dhabi Investment Authority, made a bid for a large British power-distribution network.
Heavyweight insurer QBE lost 40c to $24.58.
A 1.3% fall from Brambles to $7.09 led the Industrials sector 0.3% lower.
Qantas dipped 3c to $2.91 as the airline joined its oneworld partners in an attempt to keep the almost bankrupt Japan Airlines within the alliance.
On a positive note CSR shares jumped 7.5c, or 3.8% to $2.04 after China’s Bright Food Group offered to buy the company’s sugar and renewable energy unit for $1.5 billion. However, in response CSR said it was merely an expression of interest and the propsal was not capable of acceptance.
Auckland International Airport continued on from yesterday’s falls, dropping 3.1% to $1.56. Yesterday, the company announced it would pay about $132 million for a 24.55% stake in North Queensland Airports.
Consumer Staples weakened 0.4% as major players Wesfarmers and Woolworths lost the same amount to be trading at $31.43 and $27.90 respectively.
Metcash shed 2% to $4.38.
A mixed morning among Consumer Discretionary stocks saw the sector 0.5% in the red by noon.
Retailer Pacific Brands and television network Ten lost 2.2% and 2% to $1.13 and $1.69, while on the other side of the line Wotif.com advanced 1% to $7.03.
The Health Care sector was flat. CSL edged 10c higher to $32.03 and Sonic Healthcare dipped 15c to $14.93.
Pharmaxis rose 2.6% to $2.77 as the company announced it had signed an agreement to acquire Canadian based private biopharmaceutical company Topigen Pharmaceuticals.
Ramsay Health Care gained 18c to $11.38 after UBS upgraded its rating on the stock to “buy”. Ramsay featured heavily in broker reports this morning.
Telstra dipped 1c to $3.34 as the Telecommunications sector fell 0.6%.
Around the region, the Nikkei 225 was up 25.9 to 10,824.3, while the Straits Times Index gained 5.3 to 2,938.8. Meanwhile, the NZSE50 lost 9.1 to 3,294.6.
Spot gold was trading at US$1,152.97 per ounce, and the Aussie was buying US$0.9269.
CSR says Bright Food merely expressed interest
CSR said, in response to a media statement from Bright Food Group Co. Ltd, that the Chinese company had merely made an expression of interest and does not make any proposal capable of acceptance by CSR. The company said Bright Food had previously expressed an interest in CSR’s Sugar business however, its expression of interest similarly lacked certainty as to value, timing and likelihood of completion.
At lunchtime, CSR shares were up 7.5c to $2.04.
Pharmaxis to acquire Topigen Pharmaceuticals
Pharmaxis said it has signed an agreement to acquire Canadian based private biopharmaceutical company Topigen Pharmaceuticals Inc. The company said the transaction would enhance its respiratory drug development portfolio.
At noon, Pharmaxis shares were up 8c to $2.78.
Alcoa kicks off US season with revenue up 18%
Out of the US, 2010 economic results were heralded in by Alcoa, which reported quarterly earnings this morning. The US-based company, which has a 60-40 joint venture with Australia's Alumina, called World Alumina and Chemicals (AWAC), reported a loss of US$266 million, following unusual charges of US$275 million.
At midday Tuesday, Alumina shares were trading down 8.5c at $1.975 each.
Navitas enters US market
Navitas announced the execution of an educational affiliation agreement with Western Kentucky University for the establishment of a university pathway college at the university’s main campus. The company said the move into the US was a significant step in the global rollout of its business and academic models.
Half way through the day, Navitas shares were trading unchanged at $4.14.
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