Australian Stocks Lose Early Gains, News Corp to Split

Marcus Jacob
28 Jun, 2012
New York City

Australian indexes lost most the gains of the day in late afternoon as the prospect of an outcome from the meeting of European leaders. News Corp said it will separate its news and entertainment operations. Caltex gained on higher profit estimate.

[R]8:00 PM Sydney – Australian indexes lost most the gains of the day in late afternoon as the prospect of an outcome from the meeting of European leaders. News Corp said it will separate its news and entertainment operations. Caltex gained on higher profit estimate.[/R]

Australian stocks lost the early gains in trading as investors shied away from adding exposure to more risks ahead of the European leaders’ summit later in the day.

Global markets and Australian investors have largely discounted the summit of political leaders and are already looking ahead at the European Central Bank meeting. Bond yields of Spain and Italy have been on the rise and Spain is likely to face higher borrowing costs for a longer period unless the nation seeks a bailout from the European authorities.

The ASX 200 index edged up 1.60 to 4,044.80 and All Ordinaries index rose 1.58 to 4,085.60.

The Australian dollar rebounded to US$1.006 and struggled to hold the parity line as global economic growth prospect dim on the widening debt contagion in the euro zone.

In trading, stock turnover increased to 1.6 billion worth $3.85 billion with 492 stocks trading higher, 524 declining and 423 were unchanged.

Stock Movers

News Corp, the controversial media conglomerate known for its aggressive tactics advanced 87 cents to $22.37 and closed at a new high since February 2008. The company sources confirmed that the board has agreed to separate its maligned news division from the larger entertainment unit. The news was earlier reported by the Wall Street Journal.

Ten Network fell 2 cents to 49 cents. Fairfax Media declined 1.5 cents to 54 cents and the company said it will not grant a board seat to its prominent shareholder Gina Rinehart and nearly 20% of the company shares are held by short sellers who hope to benefit from the price decline.

BHP Billiton Limited increased 13 cents to $30.73 and Rio Tinto Limited added 8 cents to $55.16. Fortescue Metals Group rose 3 cents to $4.88.

Lynas Corporation Limited added 5 cents to 83 cents and Iluka Resources increased 39 cents to $11.23. Newcrest Mining gained 10 cents to $21.95 and Kingsgate fell 2 cents to $4.93.

Oil Search Limited gained 8 cents to $6.48 and Santos Limited plummeted 59 cents to $10.45 after the energy producer said the Gladstone liquefied natural gas project cost has increased 15% to $18.5 billion.

Caltex Australia increased 13 cents to $13.28 after the oil refiner estimated profit in the first half to surge 81% on higher production.

Metcash remained in a trading halt at $3.74 and the grocery retailer said its full year profit declined 63% on the cost of acquisition of Franklin and restructuring costs.

David Jones Limited down 1 cent to $2.26, Harvey Norman Holdings was unchanged to $1.90 and Woolworths increased 9 cents to $26.84. Kathmandu fell 4 cents to 98 cents.

Billabong International Limited closed unchanged at $1.02.

Commonwealth Bank of Australia advanced 47 cents to $52.62 and Bank of Queensland fell 6 cents to $6.54. ANZ decreased 4 cents to $21.50. National Australia Bank slid 4 cents to $23.34 and Westpac Banking Corporation declined 10 cents to $20.82. Macquarie Group slipped 4 cents to $25.56.

Perpetual Limited advanced 35 cents to $23.01.

Stockland slid 5 cents to $3.10, Leighton slumped 24 cents to $15.96 and Toll Holdings fell 5 cents to $3.86.

Qantas fell 2 cents to $1.06, Virgin Australia added 2 cents at 39.5 cents and Flight Centre advanced 38 cents to $18.83.

QR National rose 2 cents to $3.42.