Australian shares close lower on profit taking – UPDATE

SYDNEY (XFN-ASIA) – Share prices ended down as investors locked in profits following yesterday’s run into record territory, dealers said.

They said selling was focused on the banks while resource and energy stocks gained after metal and oil prices rose in overnight trading, cushioning the market from a greater retreat.

The S&P;/ASX 200 closed down 30.2 points or 0.47 pct at 6,338.8, falling from yesterday’s record finish of 6,369.0.

The All Ordinaries index lost 22.3 points to close at 6,350.2, also down from its previous record close of 6,372.4 set yesterday.

AWB retreated again after the federal government announced the company would not continue marketing Australian wheat in offshore markets from March 2008. Yesterday, further class action was filed against the AWB in the US alleging violations of anti-trust and racketeering laws.

AWB shares slumped 0.37 aud or 10.00 pct to finish at 3.33 aud.

However, Queensland Cotton Holdings surged after the company received a 149.8 mln aud takeover offer from France’s Louis Dreyfus Commodities, countering a 134 mln aud offer from Singapore-based agricultural products supplier Olam International.

Queensland Cotton shares jumped 0.36 or 7.05 pct to close at 5.47.

AIM Resources soared after reporting positive first drilling results on its Mumbwa copper-gold joint venture with BHP Billiton in Zambia. AIM Resources’ shares surged 0.095 or 45.24 pct to end at 0.135.

A total of 1.96 bln shares worth 5.99 bln aud was traded, with falls outnumbering rises 654 to 606 while 374 stocks were unchanged.

The S&P;/ASX200 June futures contract was up 1.0 point at 6,371.0.

The 10-year bond yield fell 0.0055 to 5.972 pct while 90-day bills were up 0.007 at 6.357 pct.

Aequs Securities head of institutional trading Ric Klusmam said profit-taking set in during afternoon trading.

‘There has been a bit of a sell-off, particularly in the banks, but that’s only after a very strong run,’ Klusman said.

He said overnight rises in oil, gold and base metal prices saw support for the resources sector which meant the market’s overall losses were limited.

‘It was a fairly ordinary day with a few highlights – ABC Learning jumped after its earnings upgrade and Leighton was strong again, hitting another record high,’ Klusman said.

He said merger and acquisition talk continued, with Foster’s again being talked about as a potential target even though the brewing and wine group’s share price fell today.

Klusman said Qantas defied gravity, making further gains even though the airline company’s chairman Margaret Jackson warned yesterday that the share price could fall if hedge funds, which bought the stock during a failed takeover attempt by the Airline Partners Australia consortium, exit the stock.

He said investors were buying on expectations that Qantas could to return up to 2.2 bln aud to investors.

‘They are talking about a capital return but on the other hand, Qantas has a big capex program ahead of it – they are buying a lot of planes,’ Klusman said.

National Australia Bank fell 0.31 to close at 42.78, Commonwealth Bank dropped 0.48 to 54.95, ANZ retreated 0.31 to 29.62 and Westpac shed 0.27 to 26.70.

Macquarie Bank was down 2.30 at 94.70.

QBE lost 0.13 to 32.32, AMP also fell 0.13 to 10.27, IAG shed 0.12 to 6.04 and Suncorp was down 0.16 at 21.68.

News Corp regained 0.13 to 28.98 and its non-voting stock rose 0.19 to 27.04.

Telstra eased 0.05 to 4.80, its T3 receipts were also down 0.05 at 3.34 while SingTel slipped 0.03 to 2.77.

BHP climbed 0.19 to 31.37 and Rio Tinto advanced 0.31 to 92.60.

Alumina added 0.04 to 7.62, Jubilee Mines rose 0.20 to 18.88, Kagara Zinc jumped 0.57 to 6.75 but Zinifex fell 0.10 to 17.60.

Newcrest was up 0.10 at 22.34 but Lihir Gold fell 0.06 to 3.17 and Oxiana eased 0.03 to 3.27.

Paladin advanced 0.49 to 9.25, Summit gained 0.30 to 5.55 and ERA rose 0.32 to 25.06.

Woodside climbed 0.40 to 43.70, Santos rose 0.21 to 12.95, Oil Search added 0.02 to 4.02 and Roc Oil gained 0.05 to 3.53.

James Hardie lost 0.19 to 8.90 while Rinker added 0.04 to 19.36.

Qantas gained 0.05 to 5.32, Virgin Blue rose 0.04 to 2.59 and Air New Zealand added 0.03 to 2.49.

Woolworths dropped 0.21 to 28.50, Coles fell 0.10 to 17.60 and Wesfarmers lost 0.39 to 38.27.

Foster’s retreated 0.08 to 6.34 but Lion Nathan rose 0.09 to 9.17.

CSL climbed 0.21 to 96.14 while Cochlear shed 0.94 to 61.96.

APN added 0.02 to 5.80, PBL was up 0.01 at 20.93 but Seven Network slipped 0.11 to 11.40.

ABC Learning jumped 0.47 or 6.66 pct to 7.53 after an earnings outlook upgrade.

(1 usd = 1.22 aud)

paul.daniel@xfn.com