Market Wrap: Miners lower following China's rate hike

Market Reports

The Australian share market closed weaker today with most of the major banks and miners slipping into the negative territory. Trading was slim today as the miners felt the pains of China’s surprise interest rate rise. On December 26, China raised interest rates for the second time in 10 weeks to counter the fastest inflation in two years. While the rest of the market was relatively unaffected by China’s rate hike, resources stocks came under pressure today.

The S&P/ASX200 Index is down 2 points to close at 4,775. On the futures market, the SPI is 8 points lower.

Company news: Blackstone Group has joined the bidding war for shopping-centre owner Centro Properties Group Ltd (ASX:CNP). According to The Australian, Blackstone made a preliminary offer, also known as an “indicative bid,” by the December 17 deadline set by Centro. The size of Blackstone’s bid is unknown but the fund manager is interested in Centro’s 600 US properties. Centro’s US portfolio is valued at around $9.5 billion as of 30 June. Shares in Centro Properties closed steady at $0.15.

Moly Mines Ltd (ASX:MOL) is deciding whether to extend a financing deadline a delay in finalising Chinese bank loans valued at $462.5 million. The company says terms and conditions for the loans, with China Export and Import Bank and China Development Bank, have predominantly been completed. Moly is using the funds to secure funding for its Spinifex Ridge project in the Pilbara region of Western Australia. Shares in Moly Mines closed 1.9 per cent higher at $1.075.

Shares of rare earths producers Lynas Corporation Ltd (ASX:LYC) jumped by over 10 per cent today after China cut export quotas by 35 per cent for the first half of 2011 compared to a year earlier. The move threatens to reduce already tight global supplies and risks action from the World Trade Organisation.

Allied Gold Ltd’s (ASX:ALD) $150 million project to refurbish and redevelop its Gold Ridge gold project in the Solomon Islands is nearing completion, with the project on track and within budget.

Tower Australia Ltd (ASX:TAL) says its independent directors have recommended a $1.76 billion takeover offer from Japanese life insurer Dai-ichi Life Insurance.

QR National Ltd (ASX:QRN) says heavy rains across Queensland will affect the company’s coal haulage for at least December and January as flooding continues to hamper access to tracks and recovery efforts.

In the best and worst performers: The best performing sector at close was Utilities, with the index gaining 27 points to close at 4,405. The worst performing sector was Materials, the index falling 47 points to close at 14,115.The best performing stock in the S&P/ ASX200 was Tower Australia as shares rallied 41.76 per cent to close at $3.87. Shares in Lynas Corporation and Medusa Mining also advanced today. The worst performing stock was ING Office Fund shares lost 3.54 per cent to close at $0.545. Shares in Ardent Leisure and Charter Hall Retail also closed in the red today.

Commodities: Gold is trading at $US1,406 an ounce; light crude is down $0.14 at $US91.35 cents a barrel on the week and the Aussie dollar is buying slightly over $US1.001.