Market Wrap: Shares close lower

Market Reports

Aussie stocks have closed the session lower, despite the market managing to reverse some of its earlier losses in afternoon trade as investors picked up bargains among battered mining stocks.

Shares started the day deep in the red after global markets suffered widespread sell-offs overnight amid fresh fears that the bailout package for Greece may not be enough to stop its debt crisis spreading elsewhere in Europe.

But declines in financial stocks later in the session were offset by a comeback from the miners. The S&P/ASX 200 Index closed the day 63 points lower at 4,675. While on the futures market, the SPI200’s down 53.

In some positive economic news: Approvals to build new homes in March soared to the highest level in almost eight years, according to the Australian Bureau of Statistics. Building approvals increased by 15.3% last month, following a revised 2.7% fall in February. They had been expected to rise just 0.8% during the month. And new motor vehicle sales rose 27.3% in April compared to the same month a year ago, according to data released by the Federal Chamber of Automotive Industries.

To company news around this afternoon: Perseus Mining Ltd (ASX:PRU) says it has generated $97.72 million from its recent capital raising in Canada. The gold miner has completed the share offering of about 50 million shares at $1.93 per share and now intends to complete a private placement of up to 15 million shares at $1.94 a share. Pending shareholder approval, the new capital raising is expected to raise $29.2 million. The money will be used to fund the ongoing exploration and development of the company’s West African gold properties. Shares in Perseus Mining closed 3.43% weaker at $1.83.

Lihir Gold Ltd (ASX:LGL) chairman Ross Garnaut has started selling shareholders a proposal in favour of teaming up with Newcrest Mining after the two companies entered into a merger implementation agreement yesterday. Mr Garnaut says company directors are unanimously of the view that Newcrest’s new $9.5 billion takeover proposal is a good deal for shareholders. But he admits that Lihir is still engaging with other companies that may also want to make an offer, and will continue to do so until the competitive process closes on June 8. If the merger is approved, Newcrest will pay Lihir one Newcrest share for every 8.43 Lihir shares plus 22.5 cents cash per share. Lihir Gold shares closed 1.06% lower at $3.75.

Also making news: A trading halt on shares in Gindalbie Metals Ltd (ASX:GBG) has been lifted after the company announced the construction cost estimate for its Karara iron ore project has been raised to $1.97 billion.

Atlas Iron Ltd (ASX:AGO) has obtained permission to make additional iron ore shipments from Port Hedland, allowing it to boost sales when prices are high. The company says it will export one shipment of about 60,000 tonnes a month from Port Hedland from June through to September.

Westpac Banking Corporation (ASX:WBC) has beaten forecasts to post a 30% rise in first half cash profit to almost $3 billion.

And global media giant News Corporation (ASX:NWS) has raised its full-year earnings guidance despite posting a decline in third quarter profit to $US839 million, down from $US2.7 billion for the same period last year.

In the best and worst performers: The best performing sector at close today was the Consumer Staples index, up 46 points at 7,356. The worst performing sector was the Financials excluding the Real Estate Investment Trust index; down 158 points at 5,600.

The best performing stock in the S&P/ ASX200 was Mt Gibson Iron, shares rose 7.59% to $1.63, while shares in Fortescue Metals Group and Eldorado Gold also closed higher.

The worst performing stock was Caltex Australia, shares fell 8.36% to $10.63. Shares in Monadelphous and St Barbara also closed weaker today.

In commodities, gold is trading at $1,170.80 U.S an ounce and light crude is down $0.13 to $82.61 U.S a barrel.