THE sharemarket closed slightly lower yesterday, dragged back by hefty falls in major miners Rio Tinto and BHP Billiton as consolidation and speculation gripped the aluminium sector.
CMC markets market analyst David Land said the market started well but then fell away.
"Rio has been falling sharply over the course of the session, with the large bid that has been made for Alcan," Mr Land said.
Rio has launched a $US38 billion ($44 billion) takeover offer for Canadian aluminium producer Alcan, but some analysts say Rio could be paying too much.
Mr Land said investors were also waiting to see if BHP Billiton was interested in US aluminum producer Alcoa and if Alcoa's Australian joint-venture partner, Alumina, could also be a target.
BHP declined to comment yesterday on speculation it was preparing a bid for Alcoa, following Alcoa's failed offer for Alcan.
The ASX200 index was down 8.6 points to 6380.8, while the All Ordinaries slipped 7.0 points to 6418.4.
On the Sydney Futures Exchange, the September share price index contract was 10 points lower at 6384 on a volume of 15,669.
Rio Tinto was $4.20, or 4.15 per cent, lower at $97.10, BHP Billitonwas off 96c at $38.20, and Alumina added 25c to $8.80.
Consolidated Minerals rose 19c to $3.45 as it defended its business performance and a takeover bid from Territory Resources loomed. Territory Resources, which is in a trading halt, last traded at $1.10.
Oil and gas producer Woodside Petroleum was off 7c at $46.71. Santos gained 22c to $14.10 as it said it would sell its exploration and production interests in the United States for a combined $US70 million ($80.55 million).
Among the major banks, the NAB was 7c higher at $39.83, Westpac improved 21c to $26.26, CBA stepped forward 29c to $55.35, and ANZ nudged up 1c to $29.43.
Among the telcos, Telstra shed 5c to $4.71.
Tel.Pacific, which specialises in pre-paid telephone services, finished its first day of trading at 21.5c, up 1.5c on its issue price.
In the media sector, Publishing and Broadcasting eased 13c to $19.70, and Fairfax inched forward 1c to $4.90.
News Corp sagged 15c to $27.28, while its non-voting stock lost 15c to $25.13.
Retailer Coles Group firmed 14c to $15.38, and Woolworths gave away 10c to $28.22.
Among gold stocks, Newmont weakened 2c to $4.76, Newcrest put on 9c to $24.66 and Lihir was steady at $3.16.
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