3:00AM New York, 7:00PM Sydney- ASX 200 index fell 3.2% after loses in resource and financial stocks.

Market Sentiment

ASX 200 index lost 3.2% or 183.5 to close at 5,609.40.

The Preliminary market turnover was 407.7 million shares worth $861.4 million, with 108 stocks closing up, 774 stocks down, and 224 unchanged.

Market Driver

BHP Billiton revised its offer for Rio by 13% to 3.4 stocks of BHP to one Rio Tinto stock. BHP disclosed the new offer in a statement to the Australian stock exchange today. BHP had been given until today by the UK Takeover Panel to formalize its offer or walk away for six months.

If successful, the takeover would result in BHP shareholders owning 56% of the merged entity and Rio Tinto investors will control 44%.

BHP Billiton CEO Marius Kloppers said that the offer, which sought to create a """"diversified resources industry super-major"""" represented a 45% premium on the fair trading value of Rio Tinto stock, which shot up after BHP Billiton first revealed it had proposed a takeover late last year.

Rio Tinto acknowledged the new offer in a statement and urged shareholders to wait for the board to review the revised offer. The offer is dependent on acceptances from shareholders owning more than 50% of the publicly held shares in each of Rio Tinto Limited and Rio Tinto plc.

Media reports in Britain today said Aluminum Corp of China, Chinalco and Alcoa, which acquired 9% of Rio, when counting the share traded in Australia, are expected to make a counter offer. Earlier Chinalco and Alcoa paid $14.2 billion for a stake in Rio Tinto.

However other media reports from Britain said sources familiar with the situation had said the Chinese were in no rush to make a next move. Meanwhile BHP''s first-half profit fell 2.4% because of higher production costs. Net income was $6 billion in the six months ended December 31, from $6.2 billion a year earlier.

BHP said costs increased 1.9% in the half and forecast the global economy will slow. Kloppers projected $3.7 billion in cost savings and revenue gains in the event of merger between the two companies.

The underlying earnings before interest and tax declined $506 million due to a weaker dollar. Earnings for the aluminum, stainless steel materials and coking coal units fell.

BHP fell 7.4% while Rio shed 1%.

Gainers and losers

Of the ASX 200 index shares, Telstra Corp led the gainers with a rise of 5% followed by increases in Telstra Corp of 3%, in Compass Resource of 1.8%, AWB Limited in of 1.4%, and in Babcock and Brown of 1.1%.

Of the ASX 200 index stocks, Perilya Limited led the decliners with a fall of 11.5% followed by losses in Centro Properties of 10.2%, in Centro Retail Group of 9.4%, in FKP Property Group of 9.2% and in IOOF Holdings LT of 9.1%.

Moss to leave Macquarie

Investment bank, Macquarie Group''s managing director and chief executive officer Allan Moss has announced that he is stepping down from the position in late May after more than 15 years at the helm.
Moss will be replaced by the current head of Macquarie Capital, Nicholas Moore. Moore, 49, who runs the division that generates more than 50% of profit, assumes the top job on May 24. Macquarie stock fell 9%.

Primary on Symbion takeover