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Before the market opened all eyes were focused firmly on BHP Billiton, and its takeover target Rio Tinto, as BHP launched its formal takeover offer.
But by 1pm Sydney time the S&P/ASX200 index had slipped 129 points while the All Ordinaries lost 125.
US stocks suffered their biggest drop in nearly a year overnight, after data showed the worst monthly contraction in the services sector since the last US recession.
The Dow Jones industrial average lost 370 points while the tech-heavy Nasdaq dropped 73 points.
In Asian trading by 1pm Sydney time, Japan’s Nikkei had lost 567 points while Hong Kong’s Hang Seng dropped 1,331.
Back in Australia BHP Billiton put the value of its improved offer for Rio at $147 billion.
If successful the deal would be the second biggest takeover ever and result in the world’s third richest company.
BHP is offering 3.4 BHP shares for each Rio Tinto share, an increase from its initial and informal proposal of a three-for-one, all-share takeover.
Rio Tinto, which has long opposed BHP’s overtures, says it is considering the offer and advised shareholders to take no action.
The takeover news overshadowed BHP’s first half results, which were also released today.
The company posted a dip in first half profit, thanks to unfavourable exchange rate movements and higher input costs.
Net profit for the six months ended December 31 was $6.68 billion, down 2.4 per cent from the same period last year.
In other news, Macquarie Group’s shares have plummeted more than seven per cent on news the bank’s chief executive Allan Moss is set to retire.
Australia’s biggest investment bank has announced current investment banking head Nicholas Moore will become CEO from May 24 this year.
The bank also announced its fiscal 2008 forecast, predicting profit to hit at least $1.8 billion, up 23 per cent from the previous year.
On the share market, things were not so rosy with downward movements prevailing.
BHP’s share price had lost $2.20 by 1pm Sydney time, while takeover target Rio Tinto jumped $2.37. Other mining stocks were mostly down on lower base metal prices. Fortescue Metals slipped 17 cents while Zinifex lost 65.
Banking stocks were also down. ANZ lost 60 cents, Commonwealth retracted 43, National Australia Bank fell 29 while Westpac lost 34.
Other majors were mixed. AMP went down seven cents, News Corp edged down three, Telstra improved 15 while Woolworths lost 55.
But by 1pm Sydney time the S&P/ASX200 index had slipped 129 points while the All Ordinaries lost 125.
US stocks suffered their biggest drop in nearly a year overnight, after data showed the worst monthly contraction in the services sector since the last US recession.
The Dow Jones industrial average lost 370 points while the tech-heavy Nasdaq dropped 73 points.
In Asian trading by 1pm Sydney time, Japan’s Nikkei had lost 567 points while Hong Kong’s Hang Seng dropped 1,331.
Back in Australia BHP Billiton put the value of its improved offer for Rio at $147 billion.
If successful the deal would be the second biggest takeover ever and result in the world’s third richest company.
BHP is offering 3.4 BHP shares for each Rio Tinto share, an increase from its initial and informal proposal of a three-for-one, all-share takeover.
Rio Tinto, which has long opposed BHP’s overtures, says it is considering the offer and advised shareholders to take no action.
The takeover news overshadowed BHP’s first half results, which were also released today.
The company posted a dip in first half profit, thanks to unfavourable exchange rate movements and higher input costs.
Net profit for the six months ended December 31 was $6.68 billion, down 2.4 per cent from the same period last year.
In other news, Macquarie Group’s shares have plummeted more than seven per cent on news the bank’s chief executive Allan Moss is set to retire.
Australia’s biggest investment bank has announced current investment banking head Nicholas Moore will become CEO from May 24 this year.
The bank also announced its fiscal 2008 forecast, predicting profit to hit at least $1.8 billion, up 23 per cent from the previous year.
On the share market, things were not so rosy with downward movements prevailing.
BHP’s share price had lost $2.20 by 1pm Sydney time, while takeover target Rio Tinto jumped $2.37. Other mining stocks were mostly down on lower base metal prices. Fortescue Metals slipped 17 cents while Zinifex lost 65.
Banking stocks were also down. ANZ lost 60 cents, Commonwealth retracted 43, National Australia Bank fell 29 while Westpac lost 34.
Other majors were mixed. AMP went down seven cents, News Corp edged down three, Telstra improved 15 while Woolworths lost 55.
