Market Wrap: Aussie stocks close in the red

Market Reports

Aussie stocks have closed in the red today as news of a big resource tax hit the miners hard with majors BHP and Rio both falling heavily on the news. Many voiced concern that billions of dollars in new projects could be at risk as a result. However strength in the banks and financial stocks helped to prevent sharper falls.

The S&P/ASX 200 Index closed the day 22 points lower at 4,786. While on the futures market, the SPI200’s down 24.

In economic news: According to figures released by the ABS today, Australia’s house price index rose 4.8% in the first quarter.

To company news around this afternoon: Agribusiness and rural services provider Elders Ltd (ASX:ELD) says write-downs on the company’s forestry assets are to slash $136.9 million off its fiscal 2010 profit. A review of its forestry asset values, found that fungal disease and lower than expected rainfall had impacted the forest yields for its central Queensland and Esperance forestry assets. The company says the fall in anticipated accrued and rental income is expected to result in a $4.3 million cut to its fiscal 2010 underlying profit. CEO Malcolm Jackman says the financial impact of the results in central Queensland and Esperance is extremely disappointing, and the company will be communicating with all affected growers and their financial advisors in coming weeks. Elders posted a $466.4 million loss for the 15 months to September 30, 2009. Shares in Elders closed 2.51% weaker at $1.165.

Drilling services company Boart Longyear Ltd (ASX:BLY) has upgraded its earnings guidance for the year as the mining sector continues to recover. Boart says its operating trends have continued to improve in the first quarter of the year with the company’s global products backlog and drill rig utilisation on the rise. The company says it now expects revenues for the year to December 31, 2010 to be 33% higher than in 2009 at US$1.3 billion, previous guidance was for revenue of around US$1.125 billion. Earnings before interest, tax, depreciation and amortisation is now expected to jump 76% to US$195 million, compared to previous guidance of US$170 million, given in February. CEO Craig Kipp says the company is experiencing a strong mineral exploration recovery across all of its global geographies. Boart Longyear shares closed 6.06% higher at $0.35.

Also making news: Budget airline Virgin Blue Holdings Ltd (ASX:VBA) and Air New Zealand today announced their intention to seek regulatory approval to create an alliance for routes across the trans-Tasman.

Wine maker Australian Vintage Ltd (ASX:AVG) has appointed Neil McGuigan as interim CEO, effective today. Mr Mcguigan is the general manager of production and supply at Australian Vintage.

WorleyParsons Ltd (ASX:WOR) is one of three global companies that have won the first contracts for a planned $10.8 billion aluminium joint venture between Alcoa and Saudi Maaden.

And Qantas Airways Ltd (ASX:QAN) says passenger numbers across its airlines increased by 11.2% in March, compared to the previous corresponding period.

In the best and worst performers: The best performing sector at close today was the Real Estate Investment Trust index, up 8 points at 908. One of the sectors with the biggest loss today was the Materials index; down 308 points at 11,985.

The best performing stock in the S&P/ ASX200 was Biota Holdings, shares rose 8.15% to $1.46, while shares in Boart Longyear and PaperlinX also closed higher.

The worst performing stock was Macarthur Coal, shares fell hard on the news of the new resource tax, falling 9.5% to $14. Shares in Energy Resources of Australia and Virgin Blue Holdings also closed weaker today.

In commodities, gold is trading at $1,178.85 U.S an ounce and light crude is down $0.07 to $86.08 U.S a barrel.


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