Market Wrap: Aus shares close lower

Market Reports

The local share market has closed the session lower today dragged down by declines in the major miners like BHP and Rio, who today announced their decision to scrap a $116 billion iron ore joint venture.

The S&P/ASX 200 Index is 37 points lower to finish at 4,652. On the futures market, the SPI200 is down 46 points.

To company news: Travel company Flight Centre Ltd (ASX:FLT) has acquired a social networking business that focuses on the growing ‘gap year’ market. The company has bought 80 per cent of, a UK based website which provides information, products and a ready-made social network to travellers undertaking an extended international break. Flight Centre has the option to buy the remaining 20 per cent of the network from founder Tom Griffiths. The amount paid for the business was not disclosed however, Flight Centre says the investment will not have a material impact on the company’s financial performance or position. Shares in Flight Centre closed 2.88% weaker at $22.25 today.

Iron ore miner Fortescue Metals Group Ltd (ASX:FMG) is to sell US$2.04 billion in bonds. The miner has launched an international roadshow to discuss an offer of US$2.04 billion senior unsecured notes to fund the first stage of its two ports, three hubs strategy. Earlier in the month the company announced it had refinanced its existing project-based senior secured notes with a US$2.04 billion corporate bank facility from JPMorgan Chase and Royal Bank of Scotland. Shares in Fortescue Metals Group closed 1.56% lower today at $6.31.

Also making news: Marengo Mining Ltd (ASX:MGO) has signed a memorandum of understanding with a Chinese construction and engineering group for financing, construction and development of its Yandera copper-molybdenum-gold project in Papua New Guinea.

Cazaly Resources Ltd (ASX:CAZ) has sold a 51 per cent interest in its Hamersley Iron Ore project to Saint Istvan Gold (ASX:SVG) for $4 million.

BHP Billiton Ltd (ASX:BHP) and Rio Tinto Ltd (ASX:RIO) have jointly decided to walk away from their planned $116 billion iron ore production joint venture in the Pilbara region of Western Australia.

And gaming company Tabcorp Holdings Ltd (ASX:TAH) has announced plans to demerge its casino operations from its wagering, gaming and Keno businesses to create two separate gaming companies.

In the best and worst performers: Majority of sectors closed in the red today, the only sector to close in the black was Telco Services with the index up 3 points to 926. The worst performing sector was Materials with the index closing down 180 points to 13,117.

The best performing stock in the S&P/ ASX200 was Perpetual shares were 22.05% higher at $37.80. The company received a takeover approach from US private equity firm Kohlberg Kravis Roberts today, valuing the company at around $1.75 billion. Shares in Platinum Australia and Gunns also closed higher.

The worst performing stock was Linc Energy shares dropping 9.27% to $1.86. Shares in Perseus Mining and Avoca Resources also closed weaker today.

In commodities, gold is trading at $1361 US an ounce. And light crude is up $0.47 at $80.78 US a barrel.

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