Australian Stocks Struggle; Lend Lease Sells Mall Stake

Marcus Jacob
24 May, 2011
New York City

Australian stocks edged lower on global economic worries. China and U.S. economic data suggest a slower economic growth and commodities turned lower in Asian trading. Banks led the decliners in Sydney trading. China based Cofco increased its offer for Tully Sugar.

[R]4:45 PM Sydney – Australian stocks edged lower on global economic worries. China and U.S. economic data suggest a slower economic growth and commodities turned lower in Asian trading. Banks led the decliners in Sydney trading. China based Cofco increased its offer for Tully Sugar.[/R]

Australian stocks traded weak as international markets turned lower on euro-zone debt worries and a slow down in the economic outlook for China and the U.S. In additions, market focused on the Australian banks dependence on foreign capital.

The ASX 200 index declined 14.2 or 0.3% to 4,628.80 and the All Ordinaries index declined 14.60 or 0.3% to 4,708.30.

The Australian dollar edged up to US$1.056 and the price of crude oil increased US$1.21 to US$98.91.

Asian market indexes traded lower on the worries that Greek debt may have to be restructured earlier than expected and yields on debts of Italy, Portugal, Spain and Ireland rose. The Spanish ruling party’s defeat in local elections also added to market jitters.

At close in European trading, Italy’s 10-year bond yield rose by 4 points to 4.81%. Greece’s 10-year bond soared 48 basis points to 17.05% and Ireland’s 10-year bond debt increased 32 basis points to 10.86%.

The benchmark yield on German 10-year bonds fell four basis points 3.02%.

Stock Movers

Banks led the decliners in trading. ANZ Banking Group declined 1% and National Australian Bank lost 0.6%. Westpac declined 1% and Commonwealth Bank fell 0.97%.

Resources linked stocks closed lower on the worries that global economic growth may slow down. BHP Billiton declined 0.1% to $43.24 and Rio Tinto added 2 cents to $79.01.

Lend Lease rose 0.8% to $8.42 after the company booked U$100 million profit from the sale of its 50% stake in King of Prussia mall in Philadelphia. The construction group sold the stake to a fund controlled by Morgan Stanley for US$545 million that it acquired in 1996.

Spotless Group declined 2.9% to $2.33 after media reports suggested that the company is in not in talks with Blackstone Group.

Energy complex related stocks edged up. Oil Search increased 1% to $6.99 and Santos Ltd closed at $13.97. Woodside Petroleum Limited increased 2 cents to $45.25.

China based Cofco offered $43 a share, $2 higher from its previous offer for Tully Sugar that valued the company at $132.9 million. Mackay Sugar last week offered $41 a share.