Leighton Holdings led the index stocks with a rise of 7.30% followed by 6.8% gain in Flight Centre, and 6% increase in Bradken, Crane Group, and SIMS Group. Perilya Ltd added 5.4% after falling 13.6% Energy Developers led the decliners in the index stocks with a fall of 9% followed by 5% loss in Queensland Gas, Arrow Energy, and 3% decline in Adelaide Bank and Sunland Group.

Crane Group Ltd. increased 6% after reporting annual income before one time charges rose 14.5% on 7% increase in sales to A$2.2 billion.

Qantas Airways said that it will set aside $40 million to cover charges from air freight price fixing.

For the third day in a row, the Reserve Bank of Australia added liquidity in the market to stem the rising interest rates and worries that credit crunch may stem economic growth. The bank added close $1.25 billion, lower than the money injected in the previous two trading days. The global injection of liquidity in local markets was carried out by the Federal Reserve Bank in Washington, the European Central Bank in Europe, and Central Bank in Japan.

In its quarterly policy, the bank also raised it inflation forecast to 3%, near the top of its range, and said that the inflation is likely to stay there during the next year. The bank also said that the economic growth is likely to increase to 4.5% at the end of the June of next year. The bank raised its target for cash rate to 6.5% last week, and forecasted today that the inflation will accelerate to 2.5% by the end of 2007 and will increase further to 3% in the year 2008.


8:00AM Akzo Nobel agreed to acquire ICI for $16.2 billion.

Akzo Nobel (AKZOY: chart), Dutch chemicals group, announced on Monday an agreement to acquire U.K. rival Imperial Chemical Industries in a cash deal worth 8 billion pounds ($16.2 billion) , or 670 pence a share. The transaction represents a 22% premium on the share price before the U.K. group announced it had received an approach in June. Akzo Nobel said that in addition to the bid price, ICI shareholders will also receive a second interim dividend of 5 pence a share.

Akzo''s previous offers of 7.2 billion pounds and then 7.8 billion pounds had been rejected by ICI. The acquisition of the maker of Dulux paints is expected to boost its coatings industry, enabling it to increase its global market share, as well as its presence in emerging markets, where ICI makes roughly a third of its sales.


7:00AM New York, 8:00PM Tokyo – Market indexes in Tokyo rebounded as investors shrugged off U.S. mortgage market problems. Commodities, real estate, and financials led the rebound.

Nikkei 225 index plunged 35.96 or 0.2% to 16,800.95 at close with financial and brokerage stocks leading the decliners. Topix index dropped 1.29 to 0.1% close at 1,632.64.

The government reported economic growth in Japan in the second quarter slowed to an annualized rate of 0.5% from a revised 3.2% in the first quarter. The nominal economic growth rate was recorded at 0.3% and the measure of price changes, GDP deflator, fell 0.3% and domestic demand deflator gained 0.2%. Consumer spending continued to grow but at a slower pace of 0.4% in the second quarter. Another report showed that current account surplus rose to 1.52 trillion yen in June, 48% from a year ago. Japan is enjoying low unemployment rate of 3.7% but wages are still falling, keeping consumer spending weak.

The central bank in Japan added $5 billion of liquidity to keep interest rate below its target rate. The third injection of liquidity in as many days calmed the markets in the region. European markets also traded higher before Tokyo close. The Reserve Bank of Australia added $1.25 billion for the third day. While the amount of capital needed to maintain liquidity in the system was much lower than in the last two days of the last week.

According an analyst report cited by Nikkei News, nine largest Japanese financial groups have combined exposure to the U.S. subprime market of 1 trillion yen. The relatively light exposure in the Japanese banking system to the troubled mortgage market in the U.S. did not prevent investors selling stocks last week.

Of the 225 stocks in the index, 110 declined, 111 gained, and 4 were unchanged. Nisshinbo Industries, maker of textile products led the index stocks with a gain of 14.4% followed by rise if 11.4% in Mitsubishi Paper, 10.5% in Tokyo Dome Corporation, and 9.8% in Mitsubishi Materials. Fuji Electric, Comsys Holdings, Nippon Soda, and Hino Motors jumped 9%. Japan Tobacco, Olympus, and Nippon Express added 7%. Casio Computer led the decliners in the index with a loss of 9.4% followed by 9% loss in Nippon Meat, Odakyu Electric, and Tokyu Corp. Nitto Boseki, Toto, and Yokogawa dropped 7%.

Credit Saison dropped 5% on the news that the expenses from unpaid loans rose to 20.1 billion, up 41% from a year ago.

Energy and metal stocks rebounded from a sharp loss in Friday trading. Mitsubishi Materials surged 10%, Nippon Soda soared 8%, Nippon Oil up 4%, and Mitsui Mining & Smelting jumped 4%.