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Sydney, Jan 9, 2009 AEST (ABN Newswire) - Wall Street closed mixed overnight with Dows fell 0.31 per cent but S&P 500 index and Nasdaq Composite up. Investors looked to the weak sales forecast from the retail sector and anticipated a 12th straight month of job losses in the Labour Department's December payroll report.

Yesterday Australian shares ended lower as the resources sector was dragged by the dropping commodities prices. The benchmark S&P/ASX200 share index closed down 85.4 points, or 2.3%, at 3694.3, and the broader All Ordinaries index was 84.6 points lower, or 2.3%, at 3643.6. Investors forecast the economic downturn may not change in a short term with more staff layoff and grim corporate results coming.

The Australian dollar has opened firmer as investors sell the US dollar ahead of an anticipated bleak report on American jobs losses due this Friday. At 0700 AEDT, the Australian dollar was trading at $US0.7094/97, up from Thursday's close of $US0.7058/62.

Crude futures retreated for a second consecutive day as the US government released more disheartening economic data and report suggesting further erosion of demand for energy. Light, sweet crude for February delivery fell 93 cents to $US41.70 a barrel on the New York Mercantile Exchange.

Key Economic Facts and Figures

The Australian Bureau of Statistics said the number of approvals fell by a seasonally adjusted 12.8 per cent in November, compared with a revised fall of 3.1 per cent in October. Economists had been expecting a fall of 1.5 per cent. The surprising fall may push the Reserve Bank to make further interest rate cut.

A report by ABS showed Australia had a surplus of A$1.5 billion, seasonally adjusted, in November, from an upwardly revised A$2.96 billion surplus in October. Exports dropped 4 per cent, while imports rose 2 per cent. Economists expect the trade surplus is likely to continue to shrink this year as demand for Australia's key exports weakened further and prices kept falling.

M&A News

Consolidated Minerals Ltd (ConsMin) said it did not plan to lift its stake in the fellow manganese miner OM Holdings(ASX:OMH) for the time being. ConsMin has advised OM Holdings in late November that it had taken a "shareholding of greater than 10 per cent so as to justify a request for a board seat", but OM Holdings refused ConsMin a board seat.

Directors of Queensland-focused mineral explorer Fusion Resources Ltd (ASX:FNS) have accepted an all-scrip takeover offer by uranium miner Paladin Energy Ltd (ASX:PDN) in respect of their personal shareholdings. Paladin made the offer of one of its shares for every six Fusion shares held on December 2, valuing the target at A$17.8 million at the time, which was swiftly recommended by the target's board.

Important Corporate News

Macquarie(ASX:MQG) warned yesterday it had experienced "exceptionally challenging" trading conditions in the December quarter that hit profitability across almost all its businesses. Macquarie Group now faces the bank's annual profit slipping below A$1 billion.

Deteriorating aviation conditions have prompted JPMorgan to downgrade its 2008-09 pre-tax profit forecast for Qantas(ASX:QAN) to below the airline's guidance of about A$500 million.

Telstra(ASX:TLS) says its financial guidance remains the same despite its exclusion from the National Broadband Network tender process, but the exclusion could cost it between A$1 billion and A$2 billion over time.

The major shareholder of Victorian gold explorer Goldstar Resources(ASX:GDR) last night called in administrators after refusing to advance A$1.6 million to the company despite a previous agreement.

Anglo Australian Resources NL (ASX:AAR)(PINK:AAURF) announced wide, high-grade copper intersections at relatively shallow depths in recent holes in the Kimberley Region of Western Australia. The company released assay results from two deposits today.


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

Related Companies

Telstra Corporation Limited.         
Qantas Airways Limited         
Paladin Energy Limited         
Orion Gold NL          
Om Holdings Limited          
Macquarie Group Limited        
Fusion Resources Limited        
Anglo Australian Resources Nl       

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