[R]3:00AM New York, 7:00PM Sydney- NAB raised rates on variable rate mortgage loans by 0.29% after the RBI raised rates by 0.25%. Other banks are likely to follow with similar rate increases.[/R]

Market Sentiment

ASX 200 index rose 1.1% or 58.9 to close at 5,435.50.

The preliminary market turnover was 1.63 billion worth $6.61 billion, with 628 stocks moving up, 597 moving down and 331 unchanged. The most traded stock was ABC Learning with a trading of 108.3 million shares worth $228.2 million.

Market Driver

National Australia Bank led other banks in hiking its interest rates after it raised its variable home loan rate by 0.29% to 9.27%.

NAB''s rate rise, which are effective from tomorrow, are higher than that by the Reserve Bank of Australia, which raised official interest rates by 0.25% to 7.25%.

NAB executive director and CEO, Ahmed Fahour told reporters that they had a responsibility to balance the needs of their shareholders as well as our customers.

He said escalating wholesale funding costs had been impacting NAB since August 2007 and this had been compounded by the rise in both short and long term wholesale funding to their highest levels in a decade in February.

Fahour said the increase in the RBA''s cash rate by 0.25% was not reflective of the true cost of funding a mortgage loan.

He said that even with the additional 0.04% change on variable rate products, NAB was continuing to absorb a significant portion of the increased wholesale funding costs but he failed to quantify the amount.

Looking ahead, Fahour said the bank was continuing to watch the market closely and would adjust its rates further if the increased wholesale funding costs do not subside. It share rose 1.3%.

Meanwhile, Australia''s fifth largest bank, St George, sent a strong signal it also may raise its lending rates, including home loans, by as much as 40 basis points. Its shares rose 2.1% after the bank today reaffirmed its guidance for earnings per share to grow by 10% this year.

Gainers and losers

Of the ASX 200 index stocks, APN/UKA European led the gainers with a rise of 23.4% followed by increases in Allco Finance Group of 21.1%, in Boart Longyear of 14.4%, in Crane Group Limited of 8.5%, and in Oil Search Limited of 8.2%.

Of the ASX 200 index stocks, ABC Learning led the decliners with a fall of 18.2% followed by losses in FKP Property Group of 5.5%, in Timbercorp Ltd of 5%, in Babcock & Brown of 4.9% and in Mount Gibson Iron of 4.4%.

Nufarm raises $200 million for acquisitions

Australia''s biggest supplier of farm chemicals, Nufarm Ltd today raise $200 million through an institutional share placement meant to raise funds for its acquisition of AH Marks Holdings Ltd and proposed acquisition of Etigra LLC.

The offering of 13.25 million shares was oversubscribed and was placed at $15.10 per share.

He said global growth drivers in agriculture remained very strong, and the longer-term outlook for Nufarm was extremely positive. Rathbone, chief executive sold four million Nufarm shares representing 13.5% of his total shareholding Nufarm.