Australian Stocks Rebund 3.6%; CP2 Receives 80% ConnectEast Shares

Marcus Jacob
27 Sep, 2011
New York City

The Australian benchmark index soared 3.6% after falling for three days in a row. The rally in Australian and in the wider Asian markets was supported on the speculation that the euro zone leaders are close to finalizing the rescue fund details. CP2 won approval of 80% ConnectEast shareholders.

[R]6:30 PM Sydney – The Australian benchmark index soared 3.6% after falling for three days in a row. The rally in Australian and in the wider Asian markets was supported on the speculation that the euro zone leaders are close to finalizing the rescue fund details. ConnectEast’s 80% shareholders tendered shares for CP2 bid of $2.2 billion.[/R]

Australian indexes rebounded with a weak conviction after a 3-day sell-off. The indexes in Sydney gained on the hopes that the European leaders are close to getting a plan in place to contain Greek crisis spreading to other nations.

The European Financial Stability Facility is close to getting approval from 9 of the 17 member nations and Finland and Greece are close to agreeing on the terms of the collateral.

Separately, the IMF chief Chrisitine Lagarde asked Greece to provide written guarantees of timetable for the new austerity measures and estimated revenues.

Greek parliament later today is expected to approve a controversial property tax and new austerity measures that will cut government staff salary cuts by 20%.

The ASX 200 index increased 140.70 or 3.6% to 4,004.6 and All Ordinaries index soared 135.9 or 3.5% to 4,064.

The Australian dollar rebounded 1.1% to US$0.991.

In trading, stock turnover decreased to 2.5 billion shares worth $5.74 billion and nearly 7 of the every 10 traded stocks declined.

Market indexes in Hong Kong rebounded 4.2% after dropping 6% in two sessions and in India jumped 2.9%.

Markets in Tokyo gained 2.8% and the index in the export driven economies like South Korea soared 5% and in Jakarta surged more than 4.3% after dropping 11% in the last two trading days.

Stock Movers

ConnectEast soared 12% to 54.5 cents after 80.4% shareholders tendered the stock to CP2 and supported the bid of $2.2 billion. Future Fund with its 4% stake voted against the deal and said it undervalues the toll road operator.

BHP Billiton Ltd increased $1.40 to $35.35 and Rio Tinto Ltd gained $3.22 to $63.42. Newcrest Mining Limited gained $1.56 or 4.8% to $34.42. Lynas Corp soared 35% to $1.18.

Fortescue Metals decreased 31 cents or 6.7% to $4.91. Iluka Resources added $1.35 to $13.27 and Paladin Energy Ltd increased 10 cents to $1.31.

Oil Search Limited increased 20 cent to $5.70, Santos Limited rose 63 cents to $11.03 and Woodside Petroleum rose $1.06 to $30.86.

Commonwealth Bank of Australia increased $1.70 to $45.55 and National Australia Bank added $1.22 to $22.38. ANZ edged up $1.01 to $19.79. Westpac increased $1.06 to $20.25.

Qantas Airways Limited added 2 cent to $1.44.

David Jones Limited closed up 11 cents to $2.80 and Wesfarmers increased $1.08 to $31.55.

Woolworths Limited increased 14 cents to $24.91 extended a day after the retailer reiterated its estimate of profit increase of 2% to 6% in the current year.

James Hardie Industries increased 13 cents to $5.86.