Nasdaq Tumbles 3.8% on Employment Report

123jump.com Staff
04 Jan, 2008
New York City

U.S. stocks fell sharply after weaker than expected employment report for the month of December. Economy created only 18,000 new jobs in the month and for the year generated 1.3 million new jobs, far less than the 2 million target set by the current U.S. administration. Intel lost nearly 10% after UBS cut its rating on the company. Crude oil and gold retreated after the jobs report. Retailers, technology, and consumer sensitive stocks fell sharply. Apple, RIM, Master Card, and Google declined.

[R]4:00PM New York, 10:00PM Frankfurt, 8:00AM next day Sydney[/R]

European Markets

In London FTSE 100 Index closed lower 130.90 or 2.02% to 6,348.50, in Paris CAC 40 Index decreased 99.29 or 1.78% to close at 5,446.79, and in Frankfurt DAX index decreased 99.72 or 1.26% to close at 7,808.69. In Zurich trading SMI closed lower 188.84 or 2.27% to close at 8,129.98.

North American Markets indexes

Dow Jones Industrial Average closed down 256.54 or 1.96% to a close of 12,800.18, S&P 500 was down 35.54 or 2.45% to 1,411.62, and Nasdaq Composite Index traded down 98.03 or 3.77% to a close of 2,504.65.

In Toronto TSX Composite lost 192.95 or 1.38% to close at 13,785.25.

Of the 30 stocks in Dow Jones Industrial Average, 2 closed higher, 28 closed lower, and none was unchanged.

Intel led the decliners in the index with a loss of 8.3% followed by decreases in Hewlett Packard of 5.8%, in Alcoa and IBM of 3.5%, in Home Depot of 3.2%, and in Honeywell International of 3.02%.

Coca Cola rose 0.34% and Johnson & Johnson gained 0.32%.


Of the stocks in S&P 500, 41 closed higher, 457 fell, and 2 were unchanged.

Two hundred and fourteen stocks fell more than 3% and one rose more than 3%.

SLM Corp led the decliners in the index with a fall of 14% followed by losses in Regions Financial of 11%, in DR Horton of 10.2%, in Jones Apparel of 9.6%, in Centex of 9.4%, in Freddie Mac of 8.9%, and in Nvidia Corp of 8.4%.

FPL Group led the gainers in the index with a rise of 3.1% followed by increases in First Energy of 2.56%, in Clear Channel of 1.9%, and in Southern Company 1.78%.

South American Markets Indexes

In Latin Markets Brazil led the decliners in the region with a loss of 2.95% followed by decreases in Chile of 2.74%, in Mexico of 1.83%, in Argentina of 1.01%, and in Peru of 0.3%.

Venezuela, the only gainer in the region, rose 0.51%.


Asian Markets

In Tokyo Nikkei 225 Index closed lower 616.37 or 4.03% to 14,691.41, in Hong Kong Hang Seng index closed higher 632.41 or 2.35% to 27,519.69, in Australia ASX 200 increased 12.80 or 0.20% to close 6,385.40.

In South Korea Kospi Index close higher 11.17 or 0.60% to close at 1,863.90, in Thailand SET index closed lower 10.92 or 1.31% to 821.71, and Indonesia JSE Index edged higher 50.13 or 1.85% to 2,765.19. Sensex index in India closed higher 341.69 or 1.68% to 20,686.89.


Bond Yields decreased on 10-year U.S. bonds to 3.87% and 30-year bonds increased to 4.37%.

[R]Commodities, Metals, and Currencies[/R]

Crude oil fell $1.29 to close at $96.790 per barrel for a front month contract, natural gas increased 17 cents to $7.845 per mBtu, and gasoline futures decreased 2.90 cents to close at 251.180 cents per gallon.

Gold dropped $3.40 in New York trading to close at $865.70 per ounce, silver closed down 3.80 cents to $15.462 per ounce, and copper for front month delivery decreased 3.05 cents to 315.75 per pound and in London copper futures increased $214.00 to $6,939.50.

Gold in 2007 rose 31%, its best annual rise in twenty eight years.

Dollar edged lower against euro to $1.4752 and lower to 109.290 yen. For the 2007 dollar lost 11.8% against euro.


[R]2:00PM New York, 7:00PM London - Retailers weigh U.K. down 2.02%.[/R]

Stocks in London traded in negative territory as retailers slumped on a report that retailers issued the highest number of negative sales updates in almost two years in the fourth quarter of 2007.

In London trading FTSE 100 dropped 2.02% or 130.9 to 6,348.50.

Of the 102 FTSE100 index, 4 gained, and 98 declined.

Liberty International led the decliners with a loss of 6.9% followed by retailer Kingfisher shedding 6.8%.

Grant Thornton reported that 22% of retailers listed in London gave negative sentiments in the fourth quarter of 2007 up from 7% from the third quarter. According to Grant Thornton, the proportion of positive sentiments in the fourth quarter fell from 21% in the previous three months to 41%. Bloomberg News reported this after an emailed statement was sent to media companies.

In another report on the volume of listing on the AIM stock market in London published on the website of Grant Thornton the secondary offerings raised more capital than the primary issues for the first time in a decade.

The value of new companies listing on AIM fell for the first time in five years in 2007, although secondary issues continued to show strong growth in a year characterised by an impressive mid-year performance and a disappointing final quarter, according to the latest research by Grant Thornton Corporate Finance.

The value of new issues on AIM in 2007 was £6.5 billion, a drop of more than a third (35%) on previous year, while secondary issues grew by at least 50% to £8.628 billion, a marked reversal on the pattern during the past decade. In total, AIM will have raised primary and secondary issues of more than £15 billion by the end of the year, equaling 2006''s final figure of £15.678 billion.

""""""""This is the first time in five years that the value of IPOs on AIM has not grown by at least 50% year-on-year, and so despite seeing several records broken in 2007, including the most funds raised in a month this June, overall it has proved to be a disappointing year in terms of growth,"""""""" said Philip Secrett, International Director of Capital Markets at Grant Thornton.

The volume of new companies listing also dropped to 275 this year from 462 in 2006, and at year end there were a total of 1,689 companies on AIM, a net gain of just 55 companies year-on-year.


Chartered Institute of Purchasing Supply index for U.K. service industries rose to a forecast beating 52.4 in December from a 4-year low of 51.9 in November. Economists had forecasted a decline to 51.6.

Also the index of business expectations at U.K. services companies declined to 67.5 in December from 69.6 in November.

The Financial Times newspaper reported today that Chancellor of the Exchequer Alistair Darling said the U.K. Treasury will propose legislation in May to allow the Financial Services Authority to question banks about their day-to-day transactions and empower the Bank of England to be more efficient in its surveillance systems.

Darling added that the Government will not make any major change to the “tripartite system” of regulation through which authority is shared by the Treasury, the Central Bank and the Financial Services Agency.

Of the 102 FTSE index shares, Carphone Warehouse led the advancers with a rise of 2.6% followed by gains in Reed Elsevier of 0.4%, in Smiths Group of 0.2%, and in Reuters Group of 0.08%.

Carphone Warehouse rose on lingering speculation the handset retailer might be approached from Vodafone Group Plc or the American retailer Best Buy.

Liberty International Plc led falling stocks with a drop of 6.9% followed by losses in Kingfisher of 6.8%, in London Stock Exchange of 6.3%, in Next Plc of 5.7%, and Enterprise Inns of 5.6%.

Next also fell after Bear Stearns downgraded the stock to “underperform”.

Other retails fell as well on the Grant Thornton report. Wolseley Plc plunged 4.85% and Marks & Spencer slumped 4.52%.

Cairn Energy Plc tumbled reporting the oil producer said it had failed to find gas at the Magnama-1 exploration well in Bangladesh, adding that the company plans to plug the well. The stock closed down 2.41%.

Vedanta Resources tumbled from earlier gains that were spurred by Financial Times reports Chinese firm Biosteel might make a bid on the companies’ operations in India and Zambia. The stock declined 1.34%.

Nester Healthcare Group gained after it said it had received preliminary takeover approaches.


[R]1:00PM New York—U.S car sales fall in December, Toyota replaces Ford as number two U.S. auto seller.[/R]

U.S car sales were stuck in low gear in December, as Toyota Motor Corp reported its 12 straight year gain and eclipsed Ford Motor Co to number two positions by auto sales in 2007. General Motors still leads the U.S. auto sales.

Monthly sales of cars and light trucks dropped 4.4% at GM, and were down 6% on the year. Toyota sales declined 1.7% while sales at Ford dropped 9.2%. Ford lost its number two position that it held for 77 years. For the year Toyota sales increased 3.1% and sales at Nissan rose 4.8%.

Chrysler LLC, meanwhile, reported an annual sales decline of 3.1% although December sales were fractionally up 0.5%.

At Nissan Motor Co, monthly sales dropped 2.4%, as Honda reported a gain of just 14 vehicles in the month helped largely by sales of its Accord and Civic brands. Honda said sales grew 2.8% in 2007.

Overall, in 2007, U.S auto sales declined 2.5% to 16.1 million including trucks and cars.

Despite growing concerns about fuel economy, car sales fell only 2.6%, and truck sales fell 2.3% in the year.

For 2007, Toyota sold 2.62 million cars and trucks against Ford''s 2.572 million. GM sold 3.82 million.

In December, GM said sales of cars and light trucks stood at 319,837 compared with 334,501 reported in the year ago period. Sales of light trucks dropped 8% to 203,254 while car sales dropped 10% to 116,583, the company said. Consumers showed weaker interest in pick-up trucks and sport-utility vehicles.

Ford''s car sales plunged 24% in fiscal 2007, as some models like the Ford Mustang aged and a new Ford Taurus sedan was unable to match the volumes of the older version. Ford also cut rental-car sales by 32% over the year. Truck sales fell 5%. Ford sold 210,855 vehicles in December.

Toyota sold 224,399 vehicles in the month. The passenger-car sales fell 1.7% to 121,581 while light-truck sales fell 1.8% to 102,818. Toyota division sales for December fell 0.7% to 189,844. Lexus division sales fell 7.2% to 34,555.

Chrysler LLC sales rose 1% in December helped by brisk sales of the new Dodge Caravan minivan sales jumped 51%. Chrysler sales sank 3% for the year as falling truck and SUV sales erased gains in the car sales.

Honda, the second-largest Japanese automaker, sold 131,792 vehicles in December and 1.55 million vehicles for the year.

In December, Nissan sold 89,555 vehicles while full-year sales gained 4.8% to 1.07 million.

The major automakers, GM, Toyota and Ford warned of a sluggish 2008 amid consumer concern of high-energy prices and a weakening U.S economy.

In a conference call Thursday, officials at Toyota lowered growth forecasts to 1% and 2% in 2008 from the initial forecast of 3%.

Toyota said growth in hybrid vehicles sales could slow in 2008, after rising in 2007 almost exclusively on one model. Sales of the Prius, the best-selling hybrid by far, increased 69.4% in 2007 to 181,221. Toyota has targeted to sell almost 275,000 hybrids in 2008, about the same as 2007.

GM said it plans to build 950,000 vehicles in the first quarter in North America, down about 11% from a year earlier. In the fourth quarter, GM North America built a higher-than-expected 1.042 million vehicles, down 6% from a year ago.

Ford said it expects the economic atmosphere to """"""""remain challenging"""""""" in 2008. The company predicts the U.S. annualized auto sales in the range of 15.5 million to 16 million in the first half of next year, with light vehicle sales ranging from 15.2 million to 15.7 million.

Ford traded down 29 cents at $6.45 and GM fell 56 cents to $23.36 at 1:03 PM in New York.


[R]11:15AM New York – Employment report dragged U.S. averages lower in the morning trading.[/R]

Dow Jones Industrial Average fell to its lowest level to 202.50 to 12,857.30, Nasdaq declined 75.02 to 2,527.65, and S&P 500 lost 25.54 to 1,421.62.

The Labor Department report on new job creations hurt the sentiment in the first two hours of trading. The payroll in December increased 18,000. For the year 2007 the economy added 1.3 million jobs after adding 2.3 million in 2006. The monthly average fell to 111,000 in 2007 from 189,000 in 2006.

The number of unemployed persons increased by 474,000 to 7.7 million in December and the unemployment rate rose by 0.3 percentage point to 5.0 percent. A year earlier, the number of unemployed persons was 6.8 million, and the jobless rate was 4.4 percent.

Both total employment, at 146.2 million, and the employment-population ratio, at 62.7 percent, decreased in December following increases in November. Total employment was essentially unchanged over the year, while the employment- population ratio declined by 0.7 percentage point over the same period.

Total nonfarm payroll employment was essentially unchanged at 138.5 million in December following gains of 159,000 in October and 115,000 in November. In 2007, payroll employment rose by 1.3 million compared with a gain of 2.3 million in 2006.

The Institute for Supply Management’s non-manufacturing index declined in December to 53.9 from 54.1 in November. The index still shows an expansion in the service sector but at a slower pace.

Average hourly earnings of production and nonsupervisory workers on private nonfarm payrolls rose by 7 cents, or 0.4 percent, in December to $17.71, seasonally adjusted. This followed a 7-cent gain in November. Average weekly earnings also grew by 0.4 percent in December to $598.60. Over the year, average hourly earnings rose by 3.7 percent, and weekly earnings rose by 3.4 percent.

[R]9:30AM New York, 8:00PM Mumbai - Sensex closed the week higher, inflation index edged higher.[/R]

India markets closed higher on Friday with the Bombay Stock Market benchmark index advancing 1.7% or 342 at 20,687. In the broader markets, Nifty held up in green by 1.6%. The 50-share index closed at 6,274.

Among advancers from the Sensex index were Larsen & Toubro, Hindalco Industries, ICICI Bank, Reliance Industries, ONGC and Reliance Communication with a rise of 2.9% more.

Of the National Stock Excahnge-50 stocks, Reliance Petroleum, Sterlite Industries, HDFC, Siemens India and Cairn India were some of the key gainers. The shares advanced over 2.5% each.

Among key draggers in the broader index were NTPC, Nalco, Sun Pharma, BPCL and Hero Honda Motors. The stocks slid 1.5% or more.

Buying was visible in metal stocks. Sterlite Industries, Hindustan Zinc, Shree Pre-coated Steels, Maharashtra Seamless and Jindal Steel & Power surged 1.6% or more.

Banking stocks also gained. On Friday Finance Minister P Chidambaram said PSU banks should slash deposit and lending rates by half a percent to spur investment and consumption so that the economy can sustain its current growth momentum.

Kotak Mahindra Bank, Axis Bank, Union Bank of India, Andhra Bank and Centurion Bank of Punjab rose 0.7% or more.

Of the BSE stocks, 1470 shares declined, 1437 advanced, and 17 remained unchanged. Among the Sensex shares, 16 slid and the rest remained unchanged.

Turnover on the BSE stood at 10,960 crore rupees. Reliance group stocks dominated turnover charts on BSE. Reliance Petroleum recorded the highest turnover of 430.87 crore rupees followed by Reliance Natural Resources at 397.94 crore rupees, Reliance Industries at 271.34 crore rupees. Turnover on the NSE stood at 23,686 crore rupees.

Elsewhere in Asia, markets closed mixed with Hong Kong''s Hang Seng surging 2.4% while South Korea''s Kospi also gained ground. Japan''s Nikkei plunged 4.03%, its first decline in ten year on the first trading day of a new year.

Inflation surged 3.5% at the end of last week December pushed by prices of manufactured and fuel items versus 3.45% at the end of previous week. The wholesale price index stood at 5.78% in the same period a year ago.

During the week under review, furnace oil increased 5% and bitumen coal rose by 4% and naptha surged by 3%. Coffee and vegetable prices went up while gram, moong, urad and rice got cheaper.

Of the Sensex index stocks, ICICI Bank led the advancers with a rise of 4.2% to 1,279 rupees. State Bank of India shed 0.4% to 2,386 rupees, and HDFC Bank fell 0.08% to 1,696 rupees.

Reliance Communications surged 3.7% to 760.2 rupees and Larsen & Toubro gained 3.9% to 4,220 rupees.

Oil & Natural Gas Corporation jumped 2.6% to 1340 rupees and Cairn India was up 2.3% to 260.6 rupees.

Tata Steel rose 0.3% 929 rupees after the company said it has signed a joint venture agreement with the Steel Authority of India for incorporation of a joint venture company, for coal mining activities in Jharkhand.

Reliance Industries advanced 2.6% to 2,979 rupees on news reports that it has emerged as the highest bidder for the Motipur sugar unit of Bihar State Sugar Corporation at a price of 57 crore rupees, marginally higher than the floor price of 55.36 crore rupees.

National Thermal Power Corporation fell 2.2% to 270.5 rupees. Mahindra & Mahindra shed 1.4% to 824 rupees, Tata Motors slipped 1.3% to 783.8 rupees while and Maruti Suzuki India slid 1.1% to 964 rupees.

Infosys slipped 1.05% to 1,695 rupees, TCS shed 0.9% to 1,009 rupees, Satyam Computers was down 0.6% to 423.5 rupees and Wipro lost 0.3% to 493.9 rupees.

Reliance Petroleum gained 4.8% to 243.5 rupees, Reliance Natural Resources advanced 2.7% to 207.8 rupees, Reliance Capital climbed 2.8% to 2743 rupee, Reliance Industrial Infrastructures surged 5% to 2660.35 rupees, and Adlabs Films climbed 16.4% to 1840 rupees.

Reliance Energy slipped 0.7% to 2,499.9 rupees. The Reliance Power Initial Public Offering will open for subscription on 15 January 2008. REL holds 50% stake in Reliance Power.

The price band for the IPO is set between 405 rupees to 450 rupees. The IPO is scheduled to close on January 18, 2008.


[R]9:00AM New York, 9:00PM Hong Kong - Rising gold and oil prices lift Hong Kong stock average by 2.4%.[/R]

In Hong Kong trading Hang Seng index snapped a two-day decline to close up 2.4% or 632.41 to 27,519.69. Hang Seng China Enterprises index gained 2.8% to 15,903.40. For the week Hang Seng index edged up 0.5%.

About HK$5.6 billion worth of shares changed hands during today’s trading session.

Commodity and energy-related stocks rose after gold and oil increased to record highs. Gold reached $868.89 per ounce yesterday as a falling dollar and worries of inflation drove international investors to precious metals and other commodities.

Commodities also rose after CLAS said today investors should buy shares of Chinese gold and coal producers, as they are most likely to be cushioned from the Chinese government measures to prevent the economy from overheating.

CLAS further added that the telecommunications sector is further set to benefit in 2008 as there is likely to be a restructuring in the industry.

China coal rose 3.5% to HK$24 and Zhaojin mining climbed 7.1% to HK$37.05.

Zijin Mining jumped 7.2% to HK$13.44 after Goldman Sachs raised a target on the stock by 11% to HK$15.

A Hong Kong-based jeweler Hang Fung Gold Technology Ltd rose the most since June 2000 after saying it plans to sell a metric ton of gold this month. Stocks rose 26% to HK$2.51 as a result.

Crude oil for February delivery rose to $100.09 per barrel. Cnooc Limited rose 5.6% to HK$13.86 and Petroleum & Chemical Corporation rose 5.1% to HK$11.66.

Li & Fung Limited, which supplies goods to Wal-Mart, rose 3.2% to HK$31 after demand from the U.S. manufacturer rose more than forecasted in November.

Shanghai Securities news reported yesterday that China’s combined funds under management jumped from Rmb 879 billion in 2006 to Rmb 3.2 trillion at the end of 2007, spurred by stock market rise.

The value of assets at stock funds including closed end funds, nearly quadrupled to Rmb 2.5 trillion, accounting for 77% of the assets.

Bloomberg news reported today China National Materials Company, which is the world’s largest provider of cement-making equipment, managed last month to raise an extra HK$629 million by selling more shares in its initial public offering in Hong Kong to cover excess demand. The stock gained 9.1% to HK$11.28.

Tsingtao Brewery Co jumped 9.9% to HK$2.90 on yesterday’s reports that it will pay Rmb 171 million to buy out its partner in a mainland venture.


[R]6:00AM New York, 8:00PM Tokyo - Automakers, Shipping lines and exporters drag Tokyo down 4.03% on the first day of trading in 2008.[/R]

Japan stock market averages traded in the red on the first day of trading of the year weighed down by heavy losses by automakers as the U.S. auto sales declined.

In Tokyo trading Nikkei 225 dropped 4.03% or 616.37 to 14,691.41, the first fall on the first day of trading since 2001, while the broader Topix Index slumped 4.3% or 63.77 to 1,411.91, the largest decline on the first day of trading since the creation of the index in 1949.

The market was only open for the morning session.

In the first section of the Tokyo Stock Exchange 14 billion shares valued at 1.7 trillion yen were traded and in the section 239 million shares worth 4.3 billion yen changed hands.

Of the stocks in Nikkei 225 index, 5 rose, 219 declined, and 1 was unchanged. Of the index stocks, 23 stocks shed 6% or more.

Sumco Corp led the decliners in the index with a fall of 9.9%, followed by Nissan Motor Corporation shedding 9.2% as the company and Toyota sold fewer cars in the U.S.

Other automakers fell as well. Isuzu Motors dropped 7.5% and Hino Motors Limited plunged 6.9%.

Automakers General Motors Corporation, Ford Motor Company and Toyota Motor Corporation and others reported yesterday that the Americans bought 16.1 million cars and trucks last year, the lowest in nine years.

Toyota Motor Corporations vice president for communications Irv Miller reported yesterday that the company sales fell from 228,322 vehicles from a year earlier to 224,399 vehicles in December. The company also displaced the Ford Motor Company as the second largest seller in the U.S. in 2007 as it sold 3.1% more cars in 2007 to 2.62 million.

However, the automaker reported its sales to the U.S. fell 1.7% in December and also cut its sales forecast for the U.S. market from the projected 3% gain to between 1% and 2%.

U.S. ADP Employers Services, private payroll processing services, reported yesterday that U.S. companies added 40,000 jobs in December compared to a 173,000 increase in November.

Of the Nikkei 225 index shares Sanyo Electric Company led gainers with a rise of 1.95% followed by rises in Inpex Holdings of 0.83%, in Japan Steel Work of 0.79%, in Nikko Cordial Company of 0.54%, and in Dainippon Sumitomo of 0.12%.

Inpex rose after crude oil prices for February delivery reached a record $100.09 per barrel on falling U.S inventories, persistent Middle East tensions, and no signs of a decline in demand from China, India, and the U.S.

Sumco Corporation led decliners in the Nikkei 225 index with a fall of 9.9% followed by losses in Nissan Motor Corporation of 9.2%, in Mazda Motor Corporation of 7.7%, in Mizuho Trust & Banking of 7.7%, and NGK Insulators of 7.6%.

Nissan Motor Corporation fell after it reported that the U.S. sales in December dropped 2.4%.

Shipping lines fell after the Baltic Dry Index, which gauges prices, slumped for the nine days in a row by 1.5% as China scaled back its iron ore imports. Kawasaki Kisen declined 7.10% and Mitsui OSK Lines plunged 5.40%.

Exporters also declined after the yen weakened from 109.39 to 109.40 against the dollar. Canon Inc climbed down 5%, Sony Corporation edged down 6.61% and Casio Computer declined 6.08%.

The Asahi newspaper, on its online publication, reported today that IHI Corp is investigated by the Securities and Exchange Surveillance Commission for falsifying earnings report. The company is expected to be fined 1.7 billion yen if proven guilty of wrongdoing.

IHI Corp in December announced significant revisions in the company’s earnings report for the fiscal year ended March 2007 as well as in the six-month period ended September 2006.

SESC officials are reportedly paying special attention to capital increases totaling 64 billion yen that IHI reported in January and February 2007.

Bloomberg news service reported today that Takeda Pharmaceuticals Company applied to the U.S. Food and Drug Administration to sell Alogliptin as a daily treatment for type-2 diabetes. The new drug is poised to replace Astos and hedge against future losses when Astos pills patent expires in 2011.

Analysts believe the new drug might begin selling in 2009, generating $2 billion per year. Takeda closed down 6.9%.

Nippon Telegraph and Telephone fell on Nikkei News reports the company will cut leasing fees for its fiber optic lines by 7% for the fiscal year starting April. Spokesman for regional unit NTT East Corporation Masaya Suzuki and Yasuhiro Lida for NTT West said they will file proposed new rates with the telecommunications industry by January 15.


[R]5:00AM New York, 9:00PM Sydney- ASX 200 index gained 0.3% after gains in resource stocks[/R]

ASX 200 index gained 0.2% or 12.80 to close at 6,385.40.

The Preliminary market turnover was 1.61 billion, worth a total $3.77 billion, with 640 stocks moving up, 549 moving down, and 336 unchanged.

The most actively traded stock was Gondwana Resources with 131.7 million shares worth $3.3 million.

National Australia Bank Ltd and Australia & New Zealand Banking Group Ltd set the tone for other banks by becoming the first two banks to respond to the global credit market turmoil by increasing their interest rates on mortgages to recover higher funding costs, without action from the central bank.

Australia''s biggest lenders last raised home loan rates without any action from the central bank over ten years ago. National Australia Bank hiked its variable rate for home loans by 12 basis points to 8.69% while ANZ, raised the borrowing charge for some of its products by 25 basis points to 8.44% and 8.54%.

The central bank last increased its key rate by a quarter of a percentage point, or 25 basis points in November resulting in its benchmark rate rising to an 11-year high of 6.75% as it sought to stem inflation after concerns that the economy''s expansion was likely to be inflationary.

Westpac and Commonwealth Bank of Australia officials said the two banks were also reviewing their charges. National Australia Bank gained 1%, ANZ rose 0.3%, Commonwealth gained 0.5% percent and Westpac banking was up 0.2%.

Centro Properties Group today disclosed that it has just 50% of its Australian dollar borrowings hedged and 40% of its U.S. dollar borrowings. The latest development comes after the group''s failure to extend interest rate hedges on its debt.

The Group said that any interest rates changes might result in a cut in its earnings. Centro the Australian owner of U.S. malls that put itself up for sale and invited bids of its assets as it struggled to raise money to refinance its $3.9 billion of debt.

The group lost 90% of its market value over two days in December resulting in it becoming the worst Asian casualty of the global credit squeeze. Centro shares closed up 14.7% and Centro Retail Group rose 2.6%.

Energy Resources of Australia Ltd today indicated that it has been forced to halt mining activities at its Ranger operation in the Northern Territory due to heavy rain from Tropical Cyclone Helen.

The Australian Bureau of Meteorology indicated that tropical Cyclone Helen may cross the coast and move closer to Ranger and Alcan Inc.''s Gove alumina refinery as early as tonight.

Energy Resources missed contracted deliveries last year after a flood at Ranger stopped production in February. The company''s share fell 0.2% after rising as much as 2.1% during trade.

Rams Home Loans said it has completed the sale of its brand and distribution business to Westpac. The company was Australia''s first high profile casualty of the subprime crisis.

RAMS Home Loans Group has been renamed RHG Ltd with effect from today. RAMS outgoing chief executive Greg Kolivos has been replaced by Glenn Goddard.

The sale follows the October approvals by RAMS shareholders of the sale of the group''s franchise network and all of the future business it writes to Westpac, at $140 million with RAMS retaining its existing mortgage book.

RAMS stock was up 3.3%.

The Australian dollar rose to 0.9589 from 0.9540 yesterday. The dollar has been falling from 0.9837 late last week, after investors decided to reduce holdings of higher yielding assets bought with Japanese loans following losses in global stock markets.

Of the ASX 200 index shares, Centro Properties led the gainers with a rise of 14.7% followed by increases in Lynas Corp Limited of 11%, in Aquarius platinum of 6.4%, in ABB Grain Limited of 4.8%, and in Macmahon Holdings of 4.4%.

Of the ASX 200 index stocks Fortescue Metals led the decliners with a fall of 6.5% followed by losses in APN News & Media of 6%, in Pacific Brands of 5.3%, in Flight Centre of 3.9% and in Boart Longyear of 3.8%.