Sydney, Dec 24, 2008 AEST (ABN Newswire) - Overnight US stocks fell on another round of bleak economic data. Sales of both new and existing homes tumbled in November, and prices continued to fall, as a plunging stock market and a sharply deteriorating economy drove consumers out of the market.

Yesterday the Australian market closed slightly lower led by Rio(ASX:RIO) and BHP(ASX:BHP), although metals prices were higher on the dropping of US dollar and rising Chinese imports. The benchmark S&P/ASX200 index closed down 26 points, or 0.73%, to 3531.4, while the broader All Ordinaries index fell 24.1 points, or 0.69%, to 3468.2.

At 6.45am on the Sydney Futures Exchange, the March Share Price Index futures contract was down 104 points at 3546.

The Australian dollar has opened slightly weaker as softer gold prices and late falls on US equities lowered the local currency in thin trading. At 0700 AEDT, the Australian dollar was trading at $US0.6814/19, down from Tuesday's close of $US0.6838/40.

Oil prices fell below $US40 a barrel in thin pre-Christmas trade. Light sweet crude for delivery in February delivery shed $US0.93 to $US38.98 a barrel on the New York Mercantile Exchange.

Key Economic Facts and Figures

With recession now forecast for North America, Japan and Europe, the International Air Transport Association is predicting global passenger traffic will fall by 3 per cent next year. Sydney Airport's November traffic figures showed a 5.5 per cent fall in international traffic and a 1 per cent decrease in domestic figures. While airlines are saying domestic passenger numbers are holding up over Christmas, Qantas has reported that its international traffic is suffering. The airline's October figures showed international passenger numbers were down by 7 per cent on the previous year and the percentage of seats filled on overseas flights fell 2.4 per cent.

M&A News

Malaysian low-cost carrier AirAsia has dismissed speculation it is in preliminary talks for a possible merger with Qantas's(ASX:QAN) budget offshoot, Jetstar.

Babcock & Brown Infrastructure (ASX:BBI) says it has agreed to sell new shares in its Euroports business to two investors, totalling a 29.7 per cent stake in the business. Antin Infrastructure Partners has agreed to subscribe to a 19.9 per cent share in Euoports, while Babcock & Brown European Infrastrucure Fund will take 9.8 per cent.

AGL Energy Ltd. (ASX:AGK) said it has launched a A$171 million friendly takeover bid for coal seam gas producer Sydney Gas Ltd. (ASX:SGL) to expand its portfolio of coal seam gas assets in NSW.

Commonwealth Bank(ASX:CBA) may acquire up to A$4 billion of Wizard-originated home loans. The bank will buy A$2 billion worth of loans at the end of February, and is in discussions to acquire another A$2 billion of loans.

Important Corporate News

Hedge fund manager HFA holdings(ASX:HFA) yesterday froze A$1.1 billion funds run by finance house, adding the Australian fund frozen to a estimated A$20 billion due to the financial turmoil.

Linc Energy(ASX:LNC) said its $1.5 billion deal involving the sale of some of its coal assets in Queensland to China's Xinwen Mining Group has been delayed by the global financial crisis. The transaction is expected to complete in 6-8 weeks.

Bendigo and Adelaide Bank(ASX:BEN) has raised A$175 million through an institutional placement and share purchase plan for retail shareholders.

Leighton Holdings(ASX:LEI) has won a A$460 million contract to construct Queensland's Eastern Busway. In the next few weeks Leighton is also expected to announce a small mining contract in Mongolia.

Contact

Michelle Liang
Asia Business News Asia Bureau
Tel: +61-2-9247-4344
Email: michelle.liang@abnnewswire.net


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