Market Wrap: Aussie stocks close sharply lower

Market Reports

The local share market closed sharply lower today, wiping $39 billion off the market with investors fleeing riskier assets as tensions between the Federal Government and miners heighten over the proposed mining profits tax. Weaker commodities, Hungary’s financial woes, and disappointing US economic data also weighed on the market today.

The S&P/ASX 200 Index finished the day 123 points weaker at 4,326. While on the futures market, the SPI200’s down 130.

To company news around this afternoon: National Australia Bank Ltd (ASX:NAB) subsidiary Great Western Bank has acquired certain assets and liabilities of TierOne Bank from the Federal Deposit Insurance Corporation, for US$76 million. The company says the acquisition includes all of TierOne’s US$1.9 billion in deposits and US$1.9 billion in loans under management where the Federal Deposit Insurance Corporation absorbs 80% of credit losses arising on the loan portfolio and related assets. NAB says the loss share agreement has a term of ten years for residential mortgages and five years for all other loans. The company also says the acquisition is earnings accretive and the Great Western Bank loan portfolio remains more than 100% deposit funded following the acquisition. Shares in NAB closed 3.04% lower at $23.62.

Power company, SP AusNet (ASX:SPN) has expressed disappointment with the Australian Energy Regulator’s draft price determination for Victoria’s electricity distribution businesses for 2011 to 2015, released last Friday. SP AusNet says the draft reduced the company’s proposed capital expenditure by 30.5% and operational expenditure by 24.2%. The company says if endorsed this reduction would significantly limit SP AusNet’s plans to secure, maintain and grow its network to meet anticipated consumer demand over the next five years. Managing director Nino Ficca says the draft determination fails to acknowledge the robust analysis and economic modelling that underpins SP AusNet’s submission. Mr Ficca also expressed disappointment in the regulatory process that appears to have created inconsistency between Victoria and the Australian Energy Regulators recent decisions in other states. Shares in SP AusNet closed 2.41% weaker at $0.81.

Also making news: Agribusiness firm FarmWorks Australia Ltd (ASX:FWA) has completed a strategic review of the company as it prepares for expansion. Its three-year growth strategy includes increasing the agricultural chemicals portfolio and implementing an asset management division.

Junior minor Western Plains Resources Ltd (ASX:WPG) has signed agreements to sell nine million tonnes of iron ore fines over five years from its Peculiar Knob project south of Coober Pedy in South Australia.

Pallet maker Brambles Ltd (ASX:BXB) has lost one of its biggest US customers, food giant Con Agra, to rival plastic pallet supplier IGPS.

And resource sector services company Sedgman Ltd (ASX:SDM) has signed an $80 million construction contract for the Benga coal handling and preparation plant in Mozambique.

In the best and worst performers: All sectors closed in the red today, however the sector with the smallest loss at close was the Health Care index, down 45 points at 8,261. While the sector with the biggest loss at close was the Materials index; down 382 points at 11,142.

The best performing stock in the S&P/ ASX200 was Perseus Mining, shares rose 2.38% to $1.935, while shares in Pacific Brands and Eldorado Gold also closed higher.

The worst performing was carsales.com, shares down 8.96% to close at $4.57. Shares in Mt Gibson Iron and Murchison Metals also closed weaker today.

In commodities, gold is trading at $1,217.40 U.S an ounce, and light crude is down $1.52 at $69.99 U.S a barrel.