Australian stocks: Gold is all that glisters

MELBOURNE - The Australian sharemarket closed marginally weaker yesterday, with gold stocks boosted by a surging gold price.

Winemaker BRL Hardy announced a A$1.9 billion ($2.07 billion) merger proposal with United States giant Constellation Brands just before the market closed.

Trading in BRL shares had been suspended. They last traded at $9.44.

The benchmark S&P/ASX 200 index eased 4.6 points, or 0.15 per cent, to 3051.7, and the all ordinaries index slipped 5.6 points, or 0.18 per cent, to 3024.7.

ABN Amro Morgans senior client adviser Tony Dennis said the market was "pretty uninspiring".

"Gold is going to continue to increase in value until we see the conflict in Iraq commence.

"Wait to see how the initial conflict goes over there, then I think it's time to bail [out] from gold and oil."

At 4.30pm in Sydney, the spot price of gold was US$355.90 per fine ounce, up US$5.15 from its close on Thursday.

Among gold stocks, Newcrest Mining added 13Ac to $7, Newmont jumped 10c to $4.80, Sons of Gwalia lifted 8c to $2.77 and Lihir Gold added 2c to $1.45.

One survey has said a long war in Iraq could easily drive the gold price over US$370.

World oil prices hit a two-year high as war worries and a general strike in Venezuela continued. But major Australian oil stocks were mixed, which analysts said was due to stock-specific factors.

Woodside Petroleum fell 11c to $12.14 after reporting a 2 million-barrel drop in production last year and a 6 per cent fall in sales revenue.

BHP Billiton eased 2c to $9.70.

The major banks were also mixed. National Australia Bank picked up 5c at $32.12, Westpac lifted 11c to $14.22, Commonwealth Bank slipped 4c to $27.41 and ANZ also lost 4c to $17.41.

Media giant News Corp was 10c lower at $12.20 and its preferred scrip lost 9c to $10.21. Kerry Packer's Publishing and Broadcasting was 3c stronger at $8.65.

In the retail sector, Coles Myer reversed 7c to $6.46 and Woolworths gave away 5c to $11.40.

Among the telcos, Telstra was steady at $4.66 and Optus-owner Singapore Telecommunications dumped 5c to $1.30.

Winemaker Southcorp lost 27c to $4.83. Dennis said the market was taking back gains the company had made on the back of speculation about BRL Hardy's merger.