News Corp Offers $2 Billion for Cons Media, Australian Housing Starts Plunge

Marcus Jacob
20 Jun, 2012
New York City

Australian stocks closed higher and international events dominated local trading. News Corp offered $2 billion to acquire Consolidated Media and announced restructuring of its local operations. Resource sector stocks closed higher.

[R]8:00 PM Sydney – Australian stocks closed higher and international events dominated local trading. News Corp offered $2 billion to acquire Consolidated Media and announced restructuring of its local operations. Housing starts plunged in the March quarter.[/R]

Australian stocks traded higher after a statement from G20 leaders showed a resolve among political leaders in Europe to accelerate banking industry integration and prepare a plan to deepen the fiscal union before the end of the year.

The surprise commitment and specific steps from European leaders helped markets in Asia recover but the meeting also pushed aside the focus to alleviate global poverty and fiscal and trade imbalances.

The ASX 200 index rose 9.07 to 4,132.40 and All Ordinaries index edged up 9.38 to 4,176.80.

The Australian dollar extended gains for the seventh day to US$1.019 and traded above parity for the fourth day in a row and intra-day high of six weeks at US$1.0202.

In trading, stock turnover increased to $1.87 billion worth $5.5 billion with 487 stocks trading higher, 505 declining and 400 were unchanged.

Housing starts plunged 12.6% in the quarter to March according to the latest data released by the Australian Bureau of Statistics.

The fall in the starts extended the decline of 6.9% in the final quarter of 2011 despite the two rate cuts by the central bank. The housing starts plunged 24.5% from a year ago quarter.

Total starts in the quarter declined to 30,623 on a seasonally adjusted basis according to the ABS.

Stock Movers

Consolidated Media soared 9.7% or 30 cents to $3.38 after News Corp announced takeover proposal for $2 billion.

News Corp increased 11 cents to $20.15 after the controversial news and entertainment group said it will restructure its domestic operations and cut costs to prepare for online and digital world. The plan will see several hundred jobs lost at local operations.

BHP Billiton Limited increased 11 cents to $32.60 and Rio Tinto Limited advanced 95 cents to $57.72. Fortescue Metals Group gained 6 cents to $4.91.

Lynas Corporation Limited was unchanged to $1.01 and Iluka Resources slumped 10 cents to $12.33. Newcrest Mining dropped 37 cent to $24.77 and Kingsgate slides 9 cents to $5.53.

Oil Search Limited increased 7 cents to $6.67 and Santos Limited gained 16 cents to $12.10 and Orica raised 12 cents to $24.30.

David Jones Limited fell 3 cents to $2.24, Harvey Norman Holdings closed unchanged to $1.89 and Woolworths shrank 26 cent to $26.34.

Kathmandu slipped 6 cents to $1.14. Billabong International Limited fell 3 cents to $1.83.

Commonwealth Bank of Australia advanced 50 cents to $52.09 and Bank of Queensland added 1 cent to $6.83. ANZ increased 7 cents to $21.75. National Australia Bank gained 50 cents to $23.45 and Westpac Banking Corporation closed up 40 cents to $21.20. Macquarie Group was unchanged to $26.0.

Perpetual Limited gained 34 cents to $23.63 as speculators expect another bid for the company at a higher price.

Fairfax Media extended losses for the second day by 5 cents to 59 cents after billionaire investor Gina Rinehart said she will not increase her stake in the company beyond 18.7%.

Stockland fell 2 cents to $3.28, Leighton closed down at 14 cents to $17.27 and Toll Holdings decreased 10 cents to $4.15.

Qantas rose 2 cents to $1.16, Virgin Australia was unchanged at 39 cents and Flight Centre increased 3 cents to $19.39.

QR National added 4 cents to $3.42.