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MELBOURNE - The Australian stock market closed slightly lower today, dragged back by hefty falls in major miners Rio Tinto and BHP Billiton as consolidation activity and speculation gripped the aluminium sector.
CMC markets market analyst David Land said the market had 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 US$38 billion (A$43.73 billion) takeover offer for Canadian aluminium producer Alcan, but some analysts say that 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 Inc and its Australian joint-venture partner Alumina Ltd.
BHP Billiton today declined to comment on speculation it is preparing a bid for Alcoa, following Alcoa's failed offer for Alcan.
At the 1615 AEST close, the benchmark S&P/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 nine points lower at 6385 on a volume of 13,988, according to preliminary calculations.
Rio Tinto was A$4.20, or 4.15 per cent, lower at A$97.10, BHP Billiton surrendered 96 cents to A$38.20, and Alumina added 25 cents to to A$8.80.
Oil and gas producer Woodside Petroleum was off seven cents to A$46.71, and Santos gained 22 cents to A$14.10.
Elsewhere in the resources sector, Consolidated Minerals rose 19 cents to A$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 A$1.10.
Among the major banks, the National Australia Bank was seven cents higher at A$39.83, Westpac improved 21 cents to A$26.26, the Commonwealth Bank stepped forward 29 cents to A$55.35, and the ANZ nudged up one cent to A$29.43.
Among the telcos, Telstra shed five cents to A$4.71, and Optus-owner Singapore Telecommunications dipped two cents to A$2.65.
Tel.Pacific, which specialises in pre-paid telephone services, finished its first day of trading on the stock exchange at 21.5 cents, up 1.5 cents on its issue price.
In the media sector, Publishing and Broadcasting eased 13 cents to A$19.70, and Fairfax inched forward one cent to A$4.90.
News Corp sagged 15 cents to A$27.28, while its non-voting stock lost 15 cents to A$25.13.
Retailer Coles Group firmed 14 cents to A$15.38, and Woolworths gave away 10 cents to A$28.22.
Among gold stocks, Newmont weakened two cents to A$4.76, Newcrest put on nine cents to A$24.66, and Lihir was steady at A$3.16.
The price of gold in Sydney at 1638 AEST was US$667.30 per fine ounce, up five US cents on Friday's close.
Among other stocks, Becton Property Group fell five cents to A$4.00 after it said it would acquire the property portfolio of collapsed funds manager and property investment company Fincorp.
Share market investor Djerriwarrh Investments jumped 15 cents to A$5.19 as it reported a hefty rise in annual profit.
Water technology group Hydrotech International, which debuted on the stock exchange today closed at 29 cents, nine cents above its issue price.
The top traded stock by volume was gold and base metals explorer Excalibur Mining, with 109.4 million shares worth A$3.7 million changing hands.
Excalibur was 0.4 cents higher at 3.3 cents.
On Wall Street on Friday, the Dow Jones industrial average rose 45.52 points to end at a record 13,907.25.
Preliminary national turnover was 1.85 billion shares worth A$5.47 billion, with 672 stocks up, 643 down and 327 unchanged.
- AAP