Australian Markets Rally, David Jones Soars 15% on Takeover Rumbles

Marcus Jacob
29 Jun, 2012
New York City

Australian benchmark index gained 1.2% as rally across Asia lift markets after European leaders agreed to offer direct lending to banks and approved stimulus program. David Jones soared 15% after a hostile takeover offer of $1.5 billion.

[R]8:00 PM Sydney – Australian benchmark index gained 1.2% and a rally across Asia lifted markets after European leaders agreed to offer direct lending to banks and approved stimulus program. David Jones soared 15% after a hostile takeover offer of $1.5 billion.[/R]

Australian stocks jumped in a rally that lifted markets across Asia after European leaders announced a plan to offer direct lending to banks without adding to government debts as long as governments met the EU guidelines.

The ASX 200 index increased 49.80 or 1.2% to 4,094.60 and All Ordinaries index gained 49.92 or 1.2% to 4,135.50.

For the week, the ASX index increased 1.2% after falling for three weeks in a row.

The Australian dollar rebounded to US$1.014.

Stock rally was also powered by a surge in retailers and banks after David Jones received an unsolicited takeover offer from the UK based EB Private Equity.

Stock Movers

News Corp dropped 23 cents to $21.90 and closed at a new high since February 2008 after the company confirmed its plan to split into two units worldwide except in Australia.

Ten Network added 1.5 cents to 50.5 cents. Fairfax Media rose 1.5 cents to 55.5 cents and the shareholder Gina Rinehart in an open letter to the chairman Roger Corbett demanded “performance miliestone” with a share price target of 87 cents.

BHP Billiton Limited advanced 72 cents to $31.45 and Rio Tinto Limited increased $1.34 to $56.50.

Fortescue Metals Group rose 2 cents to $4.90 and the founder Andrew Forrest acquired 6 million additional shares.

Lynas Corporation Limited added 1.5 cents to 84.5 cents and Iluka Resources increased 9 cents to $11.32. Newcrest Mining gained 66 cents to $22.61 and Kingsgate slid 8 cents to $4.85.

Oil Search Limited gained 10 cents to $6.58 and Santos Limited increased 20 cents to $10.65 after the energy producer said the Gladstone liquefied natural gas project cost has increased 15% to $18.5 billion.

Metcash declined 37 cents to $3.37 after the grocery retailer reopened from a trading halt and completed its public offering to raise capital at a discount.

David Jones Limited advanced 15% 33 cents to $2.59, Harvey Norman Holdings rose 5 cents to $1.95 and Woolworths slid 4 cents to $26.80. Kathmandu added 2 cents to $1.0.

Billabong International Limited closed up 6 cents to $1.08.

Commonwealth Bank of Australia advanced 48 cents to $53.10 and Bank of Queensland increased 8 cents to $6.62. ANZ gained 53 cents to $22.03. National Australia Bank added 20 cents to $23.54 and Westpac Banking Corporation closed up 31 cents to $21.13. Macquarie Group gained 44 cents to $26.0.

Perpetual Limited slipped 11 cents to $22.90.

Stockland fell 2 cents to $3.08, Leighton advanced 31 cents to $16.27 and Toll Holdings increased 12 cents to $3.98.

Qantas rose 2 cents to $1.08, Virgin Australia slipped 5 cents at 39 cents and Flight Centre gained 10 cents to $18.93.

QR National fell 2 cents to $3.40.