Sydney, Dec 4, 2008 AEST (ABN Newswire) - Overnight the US stocks dropped in early session on the weak economic data and turned higher after the news that US government has another plan in the works to bring down mortgage rates.

On Wednesday, the Australian stock market closed marginally higher as figures showed that economic growth slowed to a crawl in the September quarter. The benchmark S&P/ASX200 index rose 5.6 points, or 0.16 per cent, to 3,533.8, while the broader All Ordinaries added 3.1 points, or 0.09 per cent, to 3,476.5. In recent weeks, the Australian share kept see-sawed during the trading day. In a short term investors remained cautious to any trigger on the market, while the impact for low interest rates and government stimulus may need some time to work.

At 0840 AEDT on the Sydney Futures Exchange, the December Share Price Index futures contract was up 74 points at 3,630.

The Australian dollar opened weaker as the worst US services sector report on record and an estimated 250,000 American workers losing their jobs in November weighed on risk sentiment. At 0700 AEDT, the Australian dollar was trading at $US0.6421/27, down from Wednesday's close of $US0.6447/52.

Oil prices tumbled on Wednesday as weak US economic data sparked renewed concern about slowing global energy demand. New York light sweet crude for January fell 17 US cents to $US46.79 on the New York Mercantile Exchange.

Key Economic Facts and Figures

Real gross domestic product (GDP) rose by a slender 0.1 per cent in the September quarter, according to figures from the Australian Bureau of Statistics (ABS). It was the worst result since the December quarter of 2000, when the economy shrank by 0.9 per cent, and down from an upwardly revised 0.4 per cent in the June quarter. The annual pace of growth softened to 1.9 per cent compared with 2.7 per cent in the June quarter, ABS said.

Meanwhile, Australia's services sector was shown to be contracting, with the Australian Industry Group-Commonwealth Bank Performance of Services Index falling 4.3 points to 37.8 points. Since March, it has been below 50 points, the level that separates expansion from contraction.

Today the Australian Bureau of Statistics (ABS) releases building approvals data for October and the balance of goods and services data for October.

M&A News

It is rumoured that private equity firm, CVC Asia Pacific, is having second thoughts about a plan to inject more cash into PBL Media. The plan would render CVC Asia Pacific with a 95 percent stake in PBL - from 75 percent; while the stake of James Packer's Consolidated Media Holding(ASX:CMJ) would fall from 25 percent to 5 percent.

Dexus Property Group(ASX:DXS) extended the timeline to sell its 50 per cent stake in Whitford City shopping centre yesterday as the company announced it was embarking on an equity raising of about $300 million. Dexus said it would instead sell the centre by December 2010.

Important Corporate News

Babcock & Brown(ASX:BNB) was forced to seek the agreement after an unnamed bank froze a deposit worth up to A$140 million held on behalf of B&B against debt owing. B&B has received a last minute A$150 million round of short-term funding from its syndicate of creditors in a bid to avoid falling into administration.

It is rumored that Rio Tinto(ASX:RIO) has begun talks with relationship banks about refinancing its $US15 billion short-term debt now that BHP Billiton(ASX:BHP) has withdrawn its hostile takeover bid for the mining company.
Billabong International Ltd (ASX:BBG) has downgraded its full-year guidance to a range of 6pc to 10pc earnings per share (EPS) growth from the previously forecast 12pc to 16pc EPS growth provided at the time of the annual meeting in October.

Mining services provider Boart Longyear(ASX:BLY) is focusing on cost cutting as it heads into a fiscal year in which revenue could drop by as much as 30 per cent. The company has begun cutting jobs and reining in capital expenditure as its customers, which include BHP Billiton and Rio Tinto.

1. Related Stocks - Mid Market (AEST 1230)
Code   % Change   Volume     Turnover  Low   High
ASX:BNB  +88   27,997,708 $14,221,245   46    57
ASX:DXS  +2.97 21,398,271 $19,067,020   81.5  93
ASX:BHP  +1.65 8,980,172  $256,751,930  2799  2854
ASX:RIO  -9.45 7,108,351  $249,455,689  3280  3680
ASX:BLY  -9.09 9,718,543  $2,044,405    20    23.5
ASX:BBG  -17   1,392,990  $11,951,141   817   930
ASX:CMJ  -4.65 389,305    $811,811      202   225
2. Top 10 ASX on Turnover - Mid Market (AEST 1230)
Code   % Change   Volume     Turnover  Low   High
ASX:BHP  +1.65 8,981,182  $256,780,483  2799  2854
ASX:RIO  -9.45 7,109,421  $249,491,332  3280  3680
ASX:QBE  +1.68 5,554,597  $133,032,212  2353  2419
ASX:NAB  +4.19 3,193,860  $62,829,815   1895  1941
ASX:WBC  +2.06 3,133,576  $55,668,439   1671  1704
ASX:ANZ  +1.34 3,815,601  $55,703,201   1421  1466
ASX:CBA  +1.89 1,226,097  $39,968,520   3160  3220
ASX:CSL  +1.28 1,190,032  $37,851,948   3087  3240
ASX:TLS  +.72  7,109,868  $29,445,254   411   417


Michelle Liang
Asia Business News Asia Bureau
Tel: +61-2-9247-4344

Related Companies

Rio Tinto Limited          
Dexus Property Group        
Consolidated Media Holdings Limited         
Boart Longyear Limited         
Billabong International Limited        
BHP Billiton Limited          
Babcock & Brown Limited        

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