Australia Tracks Losses in Asia

Mayank Mehta, Chandrasekhar Atreya and Sanjay Barot
29 Jun, 2010
New York City

Stocks in Australia traded lower tracking losses in Shanghai, Hong Kong, Tokyo and Mumbai. Miners give two week notice to government to settle the super tax on profits. Hebei Steel and Atlas Iron Ltd talk a stake sale in Western Australia iron ore mine.

[R]6:00 PM Sydney, Australia – Stocks in Australia traded lower tracking losses in Shanghai, Hong Kong, Tokyo and Mumbai. Miners give two week notice to government to settle the super tax on profits. Hebei Steel and Atlas Iron Ltd talk a stake sale in Western Australia iron ore mine.[/R]

Australia’s stocks continued to trade down paring initial gains and echoing Asian market sentiments. Markets in Asia traded lower after the benchmark index in Shanghai dropped as much as 4.5% after the offering of AgBank was forced to lower the price.

The ASX 200 Index fell 0.88% or 38.80 to close at 4,345.70 in Sydney.

The advertising campaign by the miners of Australia against the proposed 40% super profit tax will be started again, if talks with the government fail or stall according to the Association of Mining and Exploration Companies.

“We gave them two weeks from last Friday to resolve the matter failing which we will start our advertising again. We are worried that the government may drag the issue, have an election and then there won’t be a resolution on this tax quite a number of months,” CEO of the association Simon Bennison said over phone from Perth today giving July 9 as the deadline.

Hebei Iron and Steel Group of China is in talks with Atlas Iron Ltd about purchasing a stake in a Western Australian iron ore mine, according to a China Daily report. Hebei Steel wants to acquire a stake in Ridley project in the Pilbara region since it doesn’t have overseas resources, the paper said in this report.

David Flanagan, CEO of Atlas Iron Ltd, had said on June 23 that the company is in talks with three groups from Asia and the Middle East to sell a stake in its Ridley project.

CSL Ltd, the Melbourne-based flu-vaccine maker has received a letter from the U.S. Food and Drug Administration, stating that dark particles were found in some of the batches of its seasonal and pandemic flu shot consignments.

CSL failed to investigate the issue thoroughly to rule out the possibility that they were caused by the preservative in the vaccine and rubber stoppers used for plugging the bottles, the FDA stated in a letter to the company posted on its Web site.

“Our investigations show that the particles are a discoloration of the vaccine and not foreign contamination matter,” said Sharon McHale, a company spokeswoman today in Melbourne.

Australian Prime Minister Julia Gillard said the elections would be held in the second half of the year as her government was seriously focused on finding a via-media solution to the proposed super profit tax on miners. Gillard was speaking to the Australian Broadcasting Corporation today in Melbourne when she said this.

ASX Movers

Gunns Limited led gainers in the S&P ASX 200 index with a rise of 8.7% followed by Nufarm Limited 5.0%, Charter Hall Group 3.3% and Virgin Blue Holdings Limited 3.3%.

Kingsgate Consolidated Limited led decliners in the S&P ASX 200 index with a loss of 7.8% followed by Infigen Energy 6.2%, Perseus Mining Limited 6.1%, Downer EDI Limited.5.7 % and Sigma Pharmaceuticals Limited 5.6%.

Other Movers

Atlas Iron Limited closed unchanged at A$2.13 after China''s Hebei Iron & Steel Group initiated talks for a stake in its Ridley magnetite project, the China Daily newspaper reported on Tuesday, citing unnamed sources familiar with the matter.

Australia and New Zealand Banking Group Limited, the lender, dropped 1.9% to A$21.86.

BHP Billiton plc fell 0.9% to A$38.14.

Qantas Airways Limited dropped 2.6% to A$2.24 after the budget carrier Virgin Blue Holdings Ltd hired away to senior executives of the carrier.

Rio Tinto Limited, the mining company, dropped 0.1% to A$68.52.