Australian Stocks Ease, IAG and Wesfarmers in $1.8 B Deal

Marcus Jacob
16 Dec, 2013
New York City

Investors looked ahead to Reserve Bank policy meeting minutes and mid-year federal government budget scheduled to release tomorrow. Insurance Australia Group Limited agreed to acquire insurance business from Wesfarmers Limited.

[R]4:30 PM Sydney – Investors looked ahead to Reserve Bank policy meeting minutes and mid-year federal government budget scheduled to release tomorrow. Insurance Australia Group Limited agreed to acquire insurance business from Wesfarmers Limited.[/R]

Investors in Australia looked ahead to central bank policy meeting minutes and mid-year budget review from the Federal Government scheduled to be released tomorrow.

Australian dollar rose to 89.53 U.S. cents. Stock trading turnover dropped to 603 million shares worth $3.4 billion.

The ASX 200 index fell 8.80 to close at 5,089.60 and the broader All Ordinaries slid 8.40 to 5,093.10.

A vast majority of Australian mining sector construction jobs could disappear in the next five years, according to a government agency report.

Construction jobs in the mining sector could plunge 90% from the current 78,000 to 7,000 by 2018, The Australian Workforce and Productivity Agency 2013 resources skills study showed. The report was released by a federal statutory authority.

A private report showed that China’s manufacturing activity growth dipped to a three-month low.

The flash purchasing managers’ index tracked by HSBC and Markit unexpectedly declined to 50.5 in December from 50.9 in November. Any reading above 50 indicates growth in activities.

Stocks in Review

Rio Tinto fell 18 cents to $64.91. BHP slipped 19 cents to $35.66. Woodside Petroleum Limited dropped 53 cents to $37.22.

Westpac decreased 23 cents to $30.77.

Aurizon Holdings Ltd slid 0.4% to $4.68 after the rail freight operator expects up to $197 million in write-downs in the first-half ending in December and the company plans to cut the size of its train fleet.

Amcor Limited jumped 1.5% to $11.47 after the packaging company said Federal Court of Australia approved the demerger of Orora.

Leighton Holdings Limited gained 0.6% to $15.51 after the engineering construction company formed an equal ownership venture with and Mirvac Group Ltd.

The venture was selected as a preferred developer for a part of the project that is a part of $5.2 billion Perth City Link project. The contract is expected to be signed in 2014.

Macquarie Group Ltd closed unchanged at $55.31 after the financial services provider obtained a regulatory approval to sell its $1.3 billion stake in Sydney Airport.

Senex Energy Ltd plunged 8.4% to 70.5 cents and the oil and gas explorer withdrew its proposal to merge with AWE after the company rejected a preliminary offer.

Shares of AWE Limited surged 7.2% to $1.27.

Wesfarmers Limited rose 0.5% to $41.51 after the diversified conglomerate agreed to sell the Australian and New Zealand underwriting operations of its insurance business to Insurance Australia Group for about $1.85 billion.

Wesfarmers said it plans to take one-time pre-tax profit of as much as $750 million in its second-half.