Caution in Sydney Trading; LST, Catalpa Merge

123jump.com Staff
24 Jun, 2009
New York City

Investors in Australia were cautious ahead of the U.S. rate decision. Gold and crude oil prices edged higher. Lion Selection and Catalpa Resources agreed to merge to create a mid-tier gold producer. On the last day of rights offering Rio Tinto share edged higher.

[R]3:00AM New York, 7:00PM Sydney – Investors in Australia were cautious ahead of the U.S. rate decision. Gold and crude oil prices edged higher. Lion Selection and Catalpa Resources agreed to merge to create a mid-tier gold producer. On the last day of rights offering Rio Tinto share edged higher.[/R]

Investors in Australia were cautious ahead of the rate decision in the U.S. Investors around world have been on the sidelines after the World Bank revised its estimate for a deeper global recession. The commodities prices have been on the defensive but rebounded in trading today.

Gold prices edged up 0.4% to $924.30 an ounce and crude oil prices soared 2.6% to $69.20 per barrel.

In Sydney trading ASX 200 Index gained 0.3% or 10.1 to 3,807.00. Australian dollar edged higher to 79.54 U.S. cents from 78.34 cents.

Of the ASX 200 index stocks 91, gained, 91 declined, and 19 were unchanged. ING Industrial led gainers in the index shares with a rise of 14%.

New Zealand Consumer Sentiment Rises in Q2

Westpac Banking Corp. and McDermott Ltd. reported today that the household sentiment, measuring consumer confidence, increased to 106 in the three months to June from 96 in the previous quarter, rising the most in 18 months.

A measure above 100 indicates that optimists outnumber pessimists. The survey shows that spending growth has risen more than forecasted by the central bank.

Consumers however remain pessimistic about near-term economic conditions, with a net 28% surveyed said the economy will deteriorate over the next 12 months.

Most consumers expect to be better off in the next 12 months, while a net 16% said it was a good time to buy a major household item.

Westpac economist Donna Purdue said, ""Confidence is a relative concept and the past three-months have proved far better than expected in terms of the global, housing and labor-market outlook. Confidence has lifted as a result.""

Ten Network Revenues Falls

Ten Network chairman Nick Falloon said, ""The continued negative impact of this challenging and difficult advertising market was the key factor in our third-quarter revenue being 15% below the prior corresponding period.""

Gainers & Losers

Rio Tinto increased 2.1% to A$49.60 on the last day of its rights offering of $15.2 billion.

Lion Selection surged 33% to A$1.36 after it agreed to merge with Catalpa Resource Limited which added 19.3% to 10.50 cents. The combined company will create a mid-tier gold producer. The Lion shareholders for each share held will receive one share of Catalpa after it undertakes an 11 for 1 share consolidation. Lion shareholders will receive one-time cash distribution of 10 cents.

Sundance Resources increased 6.7% and Riversdale Mining gained 6%. However, Energy Resources Australia declined 5% and Extract Resources dipped 4.6%.

Westfield added 4.9% to A$11.07 on the back of gains in Simon Property Group in New York trading.

ASX 200 Index Movers

Linc Energy Ltd led the decliners in the ASX 200 index of 9.2% followed by losses in Babcock & Brown Japan Property Trust of 8.5%, in Macquarie Airports of 8.3%, in Macquarie Infrastructure Group of 7.1% and in DUET Group of 6.9%.

ING Industrial Fund led gainers in the ASX 200 index with a rise of 13.9% followed by gains in Sundance Resources Ltd of 6.6%, in Gindalbie Metals Limited of 6.0% and Riversdale Mining Limited of 6.0%.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 40.71 or 0.43% to 9,590.32, Hang Seng index in Hong Kong increased 353.78 or 2.02% to 17,892.15, CSI 300 index in China higher 36.84 or 1.19% to 3,120.73. ASX 200 index in Australia increased 10.10 or 0.27% to 3,807.00. The KL Composite index in Malaysia closed higher 13.37 or 1.28% to 1,057.85.

The Kospi Index in South Korea increased 3.25 or 0.24% to close at 1,363.79.SET index in Thailand closed higher 11.58 or 2.03% to 581.43 and JSE Index in Indonesia increased 81.29 or 4.25% to 1,995.67. The Sensex index in India increased 98.72 or 0.69% to 14,422.73.