Australia Stocks: Challenger, Felix, GPT, IAG, Minara, Santos

By Shani Raja

July 7 (Bloomberg) -- The S&P/ASX 200 Index fell 79.60 points, or 1.6 percent, to 5,002.50 at the close in Sydney, reversing Friday's 1.7 percent advance. The broader All Ordinaries Index declined 78.30, or 1.5 percent, to 5,091.70, while the futures index expiring in September lost 1.1 percent to 5,017.

CBH Resources Ltd. (CBH AU), an Australian zinc and lead producer backed by Japan's Toho Zinc Co., dropped 2 cents, or 11 percent, to 17 cents, the lowest since November 2005. The company reported a loss for the 2008 fiscal year after metal prices dropped. The price of zinc has fallen 24 percent this year as mine supplies increased.

Challenger Financial Services Group Ltd. (CGF AU), the Australian fund manager backed by billionaire James Packer, rose 11 cents, or 5.4 percent, to A$2.16, the second-biggest gainer on the index. Challenger will buy back as much as 10 percent of its shares from July 21, the Sydney-based company said in a statement today.

GPT Group (GPT AU), Australia's fourth-largest real estate investment trust by market value, slumped 36 cents, or 15 percent, to A$2.10, the most since 1987, after cutting its full-year operating profit estimate. It was the benchmark index's second- biggest loser.

Insurance Australia Group Ltd. (IAG AU) dropped 7 cents, or 1.9 percent, to A$3.62, the most since June 23. The company may fire 500 workers as part of a review of its business this week, the Sydney Morning Herald reported, without saying where it got the information.

Minara Resources Ltd. (MRE AU), Australia's second-largest nickel producer, tumbled 47 cents, or 16 percent, to A$2.51, the lowest in almost two years. UBS AG and RBC Capital Markets cut their earnings forecasts for the company.

Rio Tinto Group (RIO AU) slumped A$2.45, or 2 percent, to A$123.25. A measure of six metals traded on the London Metal Exchange dropped 1.5 percent, and European Union regulators extended an investigation into BHP' Billiton Ltd.'s hostile bid for Rio, citing ``serious doubts'' over a combination that would control over a third of the world's iron-ore production. BHP (BHP AU) fell declined 95 cents, or 2.3 percent, to A$39.75, the lowest since April 4.

Santos Ltd. (STO AU) fell 55 cents, or 2.8 percent, to A$19.40, the lowest since May 28. Crude oil fell from near a record after Iran said it gave a ``constructive'' response to incentives intended to persuade the country to stop uranium enrichment. A compromise may allay concern Israel is ready to attack Iran's nuclear installations, starting a conflict likely to cut supply from OPEC's second-largest oil producer.

To contact the reporter on this story: Shani Raja in Sydney at sraja4@bloomberg.net.