Shares drift 0.6% lower
The Aussie market closed lower following a disappointing lead from Wall Street overnight as the European debt crisis reared its ugly head again, with Spain having its debt downgraded. Heavyweight resource and financials led losses, however they were somewhat countered by gains among defensive stocks.
On the domestic economic front, The TD Securities-Melbourne Institute gauge of consumer price inflation rose 0.5% in May, following a 0.4% increase in April.
The increase, to 19-month highs, has been attributed in part to the Federal Government’s hike in tobacco tax, however it seems the flow effect might be for the Reserve Bank to increase mortgages across the country to counter this move.
In other economic news, according to the Australian bureau of Statistics the gross operating profits of companies increased by seasonally-adjusted 3.9% to $57.2 billion in the March quarter. It was the fastest pace in 18 months.
Meanwhile, the Housing Industry Association said the volume of new home sales increased 6.2% in April on the back of a 27.6% rise in Victoria. Home sales rose 0.9% the previous month.
At the end of the day, the All Ords retreated 25.4 to 4,453.6, while the ASX/200 shed 27.8 to 4,429.7. Around 1.8 billion shares worth around $4.7 billion had changed hands.
The big four banks finished lower, with the Banks and Financials sector down 1%.
Westpac and CBA dipped 45c and 75c to $22.95 and $51.37 respectively.
Meanwhile, ANZ slid 21c and NAB eased 0.6% down.
Among the insurers AMP and IAG weakened 1.1% each. QBE capped losses with a 4c gain to $19.66.
The Property Trusts sector eased 0.1% lower, with Westfield down 6c to $12.74.
GPT lost 1.5%, however Goodman Group and Mirvac advanced 1.6% each to 63c and $1.31.
BHP Billiton and Rio Tinto lost ground as the Materials and Resources sector fell 1.2%. Their shares were down 1.9% and 1.6% respectively.
Fortescue slumped 15c, or 3.6% to $4.04.
Orica was up 31c to $25.65 after announcing it would spin-off its Dulux paints business as a separate entity.
Incitec Pivot gained 1c to $3.02.
The Energy sector slumped 0.4% with Woodside easing 51c, or 1.2% to $42.95.
Uranium stocks were lower. Extract and ERA lost 24c and 40c to $7.05 and $13.95 respectively.
Among the Industrial stocks, Virgin Blue put on 6.5% recovering some of Friday’s 30% slump. The airline received cautious support among broker reports this week, albeit at greatly reduced price targets.
Qantas rose 5c to $2.50 as the sector advanced 0.2%.
Meanwhile, Brambles rose 1.7% to $6.65 and Leighton dipped 7c to $32.62.
The Consumer Staples sector was one of the best performers across the ASX/200, adding 0.7%. Woolworths and Wesfarmers rallied 0.9% and 0.7% respectively.
Beverage makers Foster's and Coca-Cola gained 8c and 4c to $5.58 and $10.88 respectively.
The Consumer Discretionary was a mixed bag, easing just 0.4% lower overall.
Retailers were down, including Myer which weakened 5c to $3.16. Gamer Crown gained 12c, to $7.82 and Flight Centre put on 32c, or 2.0% to $16.72.
Fairfax added 1c lower to $1.51.
Much of the market news today revolved around the Healthcare stocks, with the sector up 0.9%.
Sigma announced it would open its books to potential suitor, South African based Aspen Pharmaceuticals, sending its shares 7% higher to 53.5c.
Meanwhile hospitals operator Healthscope rose 5.0% after revealing it had received two bids for the company at $5.80 per share, saying they were both superior to a previous private consortium bid of $5.75 for each share.
Spot gold was trading at US$1,213.10 per ounce, while the Aussie was buying US$0.8493.
Healthscope receives two more offers
Healthscope said it has received two takeover offers since Friday that topped that which was made by Blackstone Group and partners on May 20 valuing the hospital operator’s shares for $5.75 each. The company said the most recent offers both priced Healthscope’s shares at $5.80 each.
At the end of the day, Healthscope shares were up 26c to $5.49.
Sigma opens books to Aspen
Sigma Pharmaceuticals said it has opened its books to South African pharmaceutical manufacturer, Aspen Pharmacare, to conduct due diligence on the company as a part of its previously announced takeover offer. On 21 May Aspen offered to buy Sigma at an indicative price of 60c cents a share, valuing the company at around $700 million.
At the close, Sigma shares were trading up 3.5c at 53.5c each.
Orica set to spin off Dulux
Orica has raised the prospect of spinning off its paint and garden business, Dulux. Orica said a shareholder vote in favour of the demerger was in their best interests, citing Grant Samuel, an independent expert, which said the benefits were ‘collectively compelling and that shareholders are likely to be better off if the demerger proceeds, notwithstanding the disadvantages and risks.
At the final whistle, Orica shares were trading up 31c to $25.65.
Takeovers Panel declines to conduct proceedings on Transurban
The Takeovers Panel has declined to conduct proceedings on an application made by CP2 Limited last week requesting Transurban to not be allowed to conduct a $542.3m capital raising. The Panel said it did not consider the rights issue would have a material effect on the control of Transurban and accordingly there was no reasonable prospect that it would declare the circumstances unacceptable.
At the close, Transurban shares were down 8c to $4.29.
Tox awarded contract but downgrades guidance
Tox Free Solutions said it has been awarded a five-year contract worth an estimated $30m to provide Industrial Services to Murrin Murrin Operations Pty Ltd at the Murrin Murrin Nickel / Cobalt operation in Western Australia. The company also said even with a strong finish to FY10 it is now unlikely the company would achieve its initial guidance of $26 million to $28 million EBITDA, which was provided in August 2009.
At the end of the day, Tox shares were up 2c to $2.39.
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