The market is down 48. The SFE Futures were down 45 this morning.

Wall Street closed down 166 on Friday — its largest overnight fall in close to six months. The Dow was up 23 at best and down 187 at worst. There are fears that unrest and political dissatisfaction will spread throughout Arab nations following rioting in Egypt. The Saudi Arabian stockmarket fell 6.4% and the Dubai market 6.3% and the Egyptian market 16%.

US GDP increased 3.2% in the fourth quarter, below estimates of 3.7% although excluding inventories was higher than expected. The VIX volatility index had its biggest percentage gain since May, up 24% to 20.04. Commodities were up with the oil price gaining $3.70 to $89.34. Gold was up $22.30 to $1340.70 and US bonds were higher in a move to safe haven assets. The Aussie dollar was up at 99.98c, from 99.13c Friday.

Today’s main stories…

  • Institutional investors have written to BHP Billiton (BHP) and Rio Tinto (RIO) demanding that they return cash to shareholders through share buy back schemes rather than focus on “wasteful mega-deals” like Potash. This comes on rumours that BHP is interested in the UK’s BG Group (cost $4.5bn).
  • The joint venture between Fortescue Metals Group (FMG) and BC Iron (BCI) has moved its first train load of iron ore in WA’s Pilbara region to port. This was the first time a small iron ore miner has been able to use third-party rail infrastructure in the Pilbara.
  • Southern Cross Media Group (SXL) has made an off-market $706.8m takeover bid for Austereo Group (AEO). The Austereo board unanimously recommends the offer to shareholders, in the absence of a superior proposal. SXL down 10%. AEO up 10%.
  • OM Holdings (OMH) 2nd half production at Bootu Creek reached a record annual ore production rate of 920,000 tonnes. OMH down 2.7%.
  • Fletcher Building (FBU) has raised its offer for Crane Group (CRG) to $3.50 in cash plus 1 FBU share worth approximately $10.07 per share, up from $9.35 per share previously. CRG’s board recommends the bid to shareholders. CRG up 40c to 998c.
  • The TD Securities-Melbourne Institute inflation gauge rose 0.4% in January after a rise in food prices following the QLD floods. In the year to January inflation was 3.4%, down from 3.8% in the year to December, but still well ahead if the RBA’s target range of 2-3%.
  • The Australian reports that interest from Chinese buyers in Australian agribusinesses has “picked up significantly in the past six months”. There has been particular interest in private farms, aggregation and processing businesses worth between $10m and $200m.

Stocks hitting 52-week highs: AEO, CRG, UOS, VTA, AUT.

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