Sydney, Feb 5, 2009 AEST (ABN Newswire) - Overnight the US Dow index fell below 8000 after a strong open as the market was hit by a batch of unfavourable economic data and earnings reports.

On Wednesday, the Australian shares dropped more than 2% dragged by the property and mining sectors. The benchmark S&P/ASX200 index was down 70.8 points, or 2.02 per cent, at 3,437.9, while the broader All Ordinaries index shed 66.8 points, or 1.94 per cent, to 3,382.3. The market could restore some confidence over the news that the US service sector shows it shrank at a low pace and China's national purchasing managers index suggests a recovery in China.

Today at 0807 AEDT on the Sydney Futures Exchange, the March SPI futures index was 15 points higher at 3,411.

Key Economic Facts and Figures

Australian Bureau of Statistics data released yesterday showed that the total building approvals in December fell 2.9% month-on-month to 9,536 units, and were down 32.9% year-on-year, on a seasonally adjusted basis. The seasonally adjusted estimate for private sector houses approved fell 2.3% month-on-month to 6,813 units.

Retail sales in December were up a seasonally adjusted 3.8% month-on-month at A$19.162 billion, according to data from the Australian Bureau of Statistics.

M&A News

Brokers believe Lion Nathan (ASX:LNN) will have to increase its offer for the takeover of Coca-Cola Amatil (ASX:CCL) as the talks between majority shareholders about the proposed A$7 billion bid are continuing. The Coca-Cola Company (NYSE:KO) later sent to Kirin(TYO:2503), Lion's major shareholder, a list of conditions that would need to be satisfied before it would reconsider the offer.

Important Corporate News

Lend Lease (ASX:LLC) has issued new shares to raise A$302.5 million from a placement to institutional investors at A$6.05 a share. The funds will be used to pay off its purchase of retirement assets last year and provide a buffer for more asset write-downs.

Australand (ASX:ALZ) has reported an 85 per cent decline in net profit for the 2008 year. The group also warned a 25-30 per cent fall in 2009 operating profit.

Fairfax Media (ASX:FXJ) has responded to the capital raising speculation that it saw no present need to raise equity or refinance any debt before 2011.

Macquarie Group (ASX:MQG) says its profit for fiscal 2009 will fall to about A$900 million from the previous year, after booking further writedowns and charges in the second half of its financial year.

Webjet Ltd (ASX:WEB) delivered a net profit of A$3.7 million for the half year to December 31 2008, up 29 per cent compared with $A2.87m in the prior corresponding half.

Suncorp (ASX:SUN) has entered a trading halt and will shortly announce the departure of its chief executive John Mulcahey. Suncorp will also announce an A$900 million capital raising.

Robust Resources Limited (ASX:ROL) reported that assays results from the first two diamond drill holes in its Romang Island, Indonesia have confirmed the presence of large scale gold and silver mineralization as first indicted in drilling by Billiton between 1997 and 1999.


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

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