Gold, Oil Prices A Drag On Share Market

The share market remained weaker at noon, as sharply lower base metals, gold and oil prices deflated resource stocks.
At 12pm (AEST), the benchmark S&P/ASX200 index was down 28.6 points, or 0.5 per cent, to 5,680.8, while the broader All Ordinaries dipped 27.1 points, or 0.47 per cent, to 5,790.1.

New York's main oil futures contract, light sweet crude for July delivery, lost a hefty $US4.41 to close down at $US126.62 per barrel.

CommSec market analyst Juliette Saly said the lower oil price had overshadowed a positive lead overnight from Wall Street, which closed up half a per cent.

"Crude oil is playing on everyone's minds at the moment," Ms Saly said.

Energy stocks were lower at 12.01pm (AEST). Woodside Petroleum was down 87 cents to $64.73, Oil Search fell 52 cents to $6.12 and Santos dropped seven cents to $21.01.

Australia's second largest power retailer, Origin Energy, today rejected an improved $13.6 billion or $15.50 cash per share takeover offer from Britain's BG Group Plc, citing the increased value of its coal seam gas reserves and surprising its predator.

Origin's shares soared $1.36, or 9.32 per cent, higher to $15.96 at 12.01pm (AEST).

Ms Saly said Origin had reached a record intraday high of $16.15.

"Origin says it has pretty much doubled its coal seam gas in northern Queensland and says the offer is very much undervaluing the company.


BHP Billiton had shed $1.45, or 3.15 per cent, to $44.57 while its rival and takeover target Rio Tinto had dropped $4.59, or 3.18 per cent, to $139.78.

Ms Saly said Australia's newest iron ore miner, Fortescue Metals Group, was performing strongly after its first shipment of the bulk commodity arrived in China.

Fortescue shares were 26 cents, or 2.45 per cent, higher at $10.89 at 12.03pm.

Shares in Australia's third largest iron ore producer, Portman, have been placed in a trading halt pending the release of an announcement. The company's shares last traded at $17.52.

Also, the corporate watchdog, the Australian Securities and Investments Commission, has stopped an unsolicited offer by share market opportunist Share Express to buy Telstra shares.

Telstra shares were one cent lower at $4.73.

The banks were mostly higher. Westpac gained 20 cents to $23.05, Commonwealth Bank rose four cents at $42.83 and ANZ was up 31 cents to $21.66 but National Australia Bank bucked the trend, down 93 cents, or 2.87 per cent, at $31.47.