Isuzu Motors led advancers in the Nikkei 225 Index shares with a rise of 7.28% followed by rises in Hokuetsu Paper of 6.62%, in Kirin Holdings of 4.69%, in Kikkoman Corp of 4.14%, and in Asahi Brewers of 3.88%.

Isuzu Motor rose after 12% rise in third quarter net income on the back of increased sales in Russia and South Africa.

Sumitomo Heavy led decliners in the Nikkei 225 index shares with a fall of 11.44% followed by losses in Okuma Corp. of 10.58%, in Sumitomo Realty of 8.45%, in Kawasaki Kisen of 7.61%, and Komatsu Limited of 6.76%.

Industrial companies fell after a government report showed that private sector machinery orders declined by a seasonally adjusted 3.2% in December.

Exporters also fell after the yen firmed 0.77% from 107.31 to 107.29 against the dollar. Canon fell 2.93%, Toyota slid 0.84% and Sony Corp. shed 1.49%

Earnings Update

Japan Airlines Corp. reported third quarter net income rose to 13.1 billion yen from 10.9 billion yen a year earlier as the company increased profits on international routes and cut costs through a staff restructure.

In the quarter, customers for international trip rose 1.6% to 3.36 million customers, while domestic customers fell 6.5% to 10.5 million customers. The company plans to tap from high growth markets such as China, India and Vietnam.

Japan Airlines stock rose 2.72%.

Inpex Holdings revised upwards its full-year profit forecast to 153 billion yen in the year through March from 127 billion yen forecasted in November. Sales are also projected to rise to 1.165 trillion yen from an earlier estimate of 1.02 trillion yen on rising crude oil prices.

3:00AM New York, 7:00PM Sydney - ASX 200 index rose 1.1% on gains in retail

Market Sentiment

ASX 200 index lost 1.1% or 61.3 to close at 5,658.

The Preliminary market turnover was 1.4 billion shares worth $4.5 billion, with 698 stocks moving up, 496 moving down and 317 unchanged.

The most actively traded stock Empire Oil and Gas with 2.6 million shares worth $6.2 million changing hands.

Market Drivers

Australia's second- largest retailer, Wesfarmers Ltd’s share gained 4.9% today after yesterday’s report that it had hired UK retailer, Ian McLeod to run its Coles supermarket chain.

McLeod, who assumes office in May, would be the sixth person since 2003 to take charge of Coles supermarkets retail business. Wesfarmers last year spent $18.2 billion on acquisitions of supermarkets including the takeover of Coles Group Ltd.

Gainers and losers

Of the ASX 200 Index shares, Centro Retail Group led the gainers with a rise of 15.4% followed by increases in Commonwealth Properties of 9.1%, in Kugara Limited of 7.7%, ING Office Fund of 6.3%, and in Australian of 6.2%.

Of the ASX 200 Index stocks, AED Oil Limited led the decliners with a fall of 11.3% followed by losses in Resmed Inc of 6.4%, in Beach Petroleum of 4.6%, in Challenger Finance of 4.6% and in Centennial Coal of 4.1%.

NAB increases interest rates

The National Australia Bank today followed Commonwealth Bank lead by raising its mortgage rate above the Reserve Bank of Australia's official interest rate rise.

NAB raised its standard variable rate by 0.29% to 8.98%.

NAB chief executive for Australia Ahmed Fahour told reporters that the central bank’s cash rate did not reflect the true cost of funding a home loan, given the situation in the country.

He added that even with this additional 0.04% change on variable rate products NAB was continuing to absorb a significant portion of the increased wholesale funding costs we have incurred since August 2007.

Commonwealth Bank of Australia raised its variable rate by 0.30% while ANZ, St George and Westpac lifted rates by 0.25% in line with the central bank.

NAB gained 1.9%, Commonwealth rose 2.7% and St George Bank added 3.5%.

Xstrata sweetens Resource bid

The world's biggest exporter of power-station coal, Xstrata Coal today sweetened its unconditional cash offer price for Resource Pacific Holdings Ltd by 12% from $2.85 per share to $3.20 per share, two hours before the expiry of its earlier bid.

The new offer values the Resource pacific at $1.077 billion, 7.4% above its closing price on the exchange today.

Xstrata said the offer price was final. Resource Pacific advised shareholders to take no action in relation to the offer and said in a statement that the offer was “unimpressive”.

Xstrata however maintained that the new offer was good as it was in excess of the levels that its target’s shares have ever traded.

Xstrata is seeking to gain control of the Newpac mine, where Resource Pacific, which has missed previous production targets, is seeking to triple output of semi-soft coking coal to 8 million metric tons a year. Resource Pacific share edged 0.7% higher.


Rio Tinto Alcan to spend $691 million on smelter

Rio Tinto today said that it has earmarked 691.74 million to modernize and extend the life of the Boyne Island aluminium smelter in Queensland in collaboration with its partners.

The modernization would include the construction of a new baking furnace to reduce onsite greenhouse gas emissions, and replacement of the overhead crane and upgrade of its runway. The Boyne aluminium smelter is Australia's largest and produces more than half a million ton of aluminium each year.


AED Oil plunges 23% in 2-Day slide

AED Oil Ltd today said that it had no explanation for the current stock price fall. The company’s shares shed 11.3% extending its two-day drop to 23% and led the decliners in the ASX 200 index today.

AED said that with the exception of some minor downtime, there had been no change in activities from its previous reports to the market.

The company appointed Macquarie Group Ltd to undertake a strategic review after admitting the company required ""additional funding"" to pursue its opportunities.

Newmont says Boddington costs up

Newmont Mining Corp has revised upwards its costs forecast for the Boddington gold mine in Western Australia on the back of higher labor and material expenses and a stronger Australian dollar depressing export earnings.

Newmont, the world's second largest gold miner, said its share of the development cost had increased to between $1.4 billion and $1.6 billion, up from its earlier estimate of $900 million to $1.1 billion.

Boddington was expected to produce about one million ounces a year for the first five years of its operational life, after which production would average about 850,000 ounces a year for the remainder of the mine's life.

The mine was expected to start up in late 2008 or early 2009. Newmont, which owns 66.67% of the operation, was developing the mine south-east of Perth, in partnership with South African gold miner AngloGold Ashanti Ltd.

Newmont also forecast increased costs and a drop in production from its Australian and New Zealand operations in 2008. The gold miner said production was expected to fall between 1.06 and 1.12 million ounces following the sale of its Pajingo mine in Queensland and lower grades at its Tanami mine.

Zinifex quiet on Allegiance bid

Zinifex issued no information on its bid for Tasmanian company Allegiance despite the closure of its bid at 6pm today.

The Allegiance board had advised shareholders to reject the bid. The market was awash with expectations that Zinifex would extend its $700 million offer for Allegiance.

Corporate Express Australia earnings

Office products supplier Corporate Express Australia halted more acquisitions after posting a net profit of $68.039 million for calendar 2007.

Net Profit was up 0.6% on the previous corresponding period while revenue rose by 5.1% to $1.3 billion. Earnings before interest, tax, depreciation and amortization rose 7.2% to $112.9 million. Corp Express stock fell 3.9%.