The market is up 2 having been up 28. Good start considering the SFE Futures predicted a 47 point fall in the market this morning.

Wall Street closed down 57. Big range of trade — Up 110 at best. Down 169 at worst. The news was pretty gloomy. Financials belted — Fears that Bank of America and Merrill Lynch may need to sell assets. S&P500 Financials sector fell 3.2% — 1% up at best and 4% down at worst — down to a 5-year low — 84 out of 89 companies fell. Financials have lost more than $1 trillion off their market cap in the US this year. Lehmans down 9%, Wachovia down 6.7%, Goldman’s down 5% and Washington Mutual down 4.7% — all down ahead of earnings reports later this month. Bank of America down 3.9% on talk they may need to sell assets after buying Countrywide Financial Corp. Resources outperformed, Alcoa to report tonight — consensus says 19% fall in profit. Mortgage lenders Fannie Mae and Freddie Mac hit hard — down 16% and 18% — suggestions that under new accounting rules they will have to take off-balance sheet assets onto their books, requiring large capital raisings. Lehmans calmed the market by stating the two companies were probably exempt from such a requirement. The NASDAQ closed slightly lower.

  • Both BHP and RIO down in ADR form, 1.15% and 0.9% respectively. Doing OK in our market this morning. BHP just over $40 at 4003c.
  • Metals mostly up — Zinc up 3.71%, Aluminium up 4.72% and Nickel 1.55%. Copper down 0.73%.
  • Oil price down $3.93 to $141.38 on signals that Iran will be more flexible in negotiations over its nuclear program.
  • Gold down $4.80 to $928.80
  • Bonds unchanged with the 10 year yield at 3.90%.

PROPERTY TRUST SECTOR IN TROUBLE — Lots of press about the GPT profit warning yesterday. Share price hit 24 year low. Adds to write-downs from Valad Property Group and Mirvac in the last few weeks. Expect more property trusts to make admissions including property value write-downs and distribution (dividend) cuts. Property sector down 2.3% on average. GPT was down 15% yesterday and down another 11% today on concerns about a credit rating downgrade and the potential breach of loan covenants. Not a lot of BUY recommendations in the research yet.

The NAB Business conditions index has fallen 7 points to nil. Down from a high of 20 last year. Business confidence down from 5 to -9. No need for a rate cut on that basis.

Insurance Australia Group (IAG) up 1c to 369c ahead of their briefing tomorrow. Management need make a convincing case that they are better off without QBE Insurance (QBE) after rejecting their takeover offer. Talk of them cutting (Rebasing) their dividend.

  • Allco Finance Group (AFG) up 13% after it announced it has sold part of its Singaporean real estate arm for $138m to Frasers Centrepoint.
  • Equinox down 8% after it announced this morning that a fire at its Lumwana project has affected a transformer and a substation. Ausenco — the mining contractor in charge of the project, is down 10% Zimi Meka the CEO said insurance would cover the cost of the repair of the transformer and the substation, but is unsure the impact it will have on the time delay in commissioning. EQN down 39c to 411c.
  • Transurban (TCL) up 4.5% after their 4Q and FY revenue and traffic figures. TCL says revenue numbers look reasonably solid across all major roads.
  • Property tycoon Vincent Tchenguiz’s Consensus Business Group has requested Challenger Infrastructure Fund (CIF) hold a general meeting of unitholders to consider winding up the fund. CIF down 3c to 272c.
  • With BHP Billiton exercising its right to ask for a 20 day extension of the European Commission Phase II timetable, we can now expect it to post its 1H result before officially handing in its formal offer documents. BHP up 23c to 3998c.
  • Murchison Metals (MMX) said it will no longer continue with its pursuit of merging with Midwest Corp (MIS) because it did not have the support of Midwest’s major shareholder and bidder Sinosteel. Price now 639c.
  • Aluminium prices hit a fresh 10 year plus high on the back of escalating worries over power availability and smelter production in China.
  • Indophil’s (IRN) offer for Lion Selection Group closed – they have no relevant interest — compulsory acquisition will not be proceeding. They wish LSG every success in the future. IRN unchanged at 132.5c.
  • Avoca (AVO) announced its Higginsville gold project in WA has started gold production, with the first gold pour later this week expected to yield 1,600 troy ounces. AVO up 6c to 216c.
  • Lend Lease (LLC) said that its subsidiary had signed a contract with the US Army for the first phase to privatize hotels at military bases. LLC up 4c to 964c.
  • Fox Resources (FXR) down over 10% on the back of lower nickel prices and a strong Aussie dollar resulting in its Sholl B2 nickel project being deferred until next year. FXR down 5c to 70c.
  • Austereo (AEO) has extended CEO Michael Anderson’s contract until 2010. AEO up 2c to 158c.

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