MIDDAY REPORT
(12.35pm AEST)

The local share market has defied Wall Street's positive Friday finish and started the trading week slightly lower. At lunchtime in the East, the All Ordinaries Index (XAO) is down 8.6pts or 0.2pct to 4534.1.

Energy players are under the most pressure, despite a rise in the crude oil price. Oil is hovering around US$97.57 a barrel, thanks to a firmer US dollar and generally favourable stress tests results on European banks. However a $924 million bid by energy giant Santos (STO) to acquire the remaining 80pct of Easter Star Gas (ESG) that it doesn't already own has sent STO shares down 2.8pct to $12.86. ESG has risen 42pct to $0.845 while Bow Energy (BOW) is up 7.5pct to $1.01.

Meanwhile, Australian based iron ore miner Sundance Resources (SDL), which has predominantly African interests, has received a $1.44 billion takeover offer from Chinese miner Hanlong. Hanlong already owns 18.6pct of SDL. This deal offers SDL at 50c per share, a 25pct premium to Friday's closing price of 40c. SDL shares are up 19pct to $0.475 at lunchtime in the East.

Financial stocks are generally lower, with Macquarie Group (MQG) lower by 1.1pct to $28.69. Westpac (WBC) shares are firmer by 0.3pct to $20.65.

NewsCorp (NWS) shares remain under significant selling pressure, following the continued fall-out over the UK phone hacking scandal. News International Chief Executive Rebekah Brooks has been arrested and bailed over the incident, while Les Hinton, the editor of the Wall Street Journal resigned over the weekend. NWS shares have fallen 21pct since the 8th July.

The Australian dollar is buying US106.04c, £0.6592 and €75.4c.

(From Juliette Saly, CommSec Market Analyst)