5:00 PM Sydney, Australia – Australian stocks gyrated and the banks led the decliners and resource stocks closed higher after Rio Tinto rejected a merger offer from Switzerland-based Glencore. Australian dollar weakened as traders looked for the currency to dip to 80 U.S. cents.
Stocks in Sydney gyrated despite the Reserve Bank of Australia left its key rate on hold as expected.
Stocks swung wildly after banks struggled to find direction and Rio Tinto rejected the merger offer from Switzerland based Glencore.
Banks have been under pressure for the third week in a row on the growing worries that the latest housing boom is coming to an end and home loans may sour. Also, home prices across Australia have jumped more than 100% in the last seven years and new buyers struggle to pay steep prices in three large metropolitan areas.
The Reserve Bank of Australia left the cash rate on hold at 2.5% as expected and unchanged since last August.
Australian dollar traded at 87.72 U.S. cents and in stock trading turnover climbed to 822 million shares worth $5.59 billion.
ASX 200 index fell 8.70 to 5,284.20 and the broader All Ordinaries index slid 7.80 to 5,284.80.
Stocks in Review
Federation Centres Ltd
closed unchanged at $2.59 after the property developer singed partnerships agreement with Mt Ommaney Centre to acquired 25% stake in Brisbane-based shopping centre for a total price tag of $416.25 million.
National Australia Bank Ltd
slipped 1% to $32.38 after the subsidiary NAB Asset Management agreed to acquire approx 75% stake in London-based Orchard Street Investment Management for $7.34 billion or £4 billion.
Regis Healthcare Limited
after the nursing care operator listed its stock on Sydney stock exchange at $3.65 a share. The stock opened at $3.85 and closed at $4.02.
Rio Tinto Limited
climbed 4.3% to $60.07 after the metal and mineral producer said it was contacted by Switzerland-based diversified natural resource company Glencore Plc in July for potential merger but today the board rejected the offer and confirmed that “no discussions are taking place with Glencore”, as the “combination was not in the best interests of Rio Tinto’s shareholders.”