Sydney Retreats; Business Sentiment Drops

Chandrasekhar Atreya
10 Aug, 2010
New York City

Stocks in Australia fell after China reported weaker-than-expected imports. Business confidence fell to its lowest level in a year. Consortium of eleven miners increases offer for QR Ltd. Transurban completes acquisition of Lane Cove Tunnel.

[R]6:00 PM Sydney, Australia – Stocks in Australia fell after China reported weaker-than-expected imports. Business confidence fell to its lowest level in a year. Consortium of eleven miners increases offer for QR Ltd. Transurban completes acquisition of Lane Cove Tunnel.[/R]

The stocks in Australia closed lower after investors focused on the weaker than imports data from China. Australian exports increase are driven by the rising demand in China. The stocks were also weak after business confidence index declined to the low in a year.

The ASX 200 Index in Sydney lost 1.18% or 54.20 to close at 4,540.70.

Australian business confidence fell in July to its lowest level in more than a year adding to signs that domestic demand maybe dwindling. The confidence index fell to 2 points in June, according to a survey of more than 400 companies between July 26 and July 30 by National Australia Bank Ltd, released in Sydney today.

Business sentiment dropped for the fifth straight month, particularly in companies not helped by the mining boom, underscoring the divide in the economy where retail sales, housing industry and lending have weakened.

Santos Ltd limited lifted it profit outlook, surprising surprised the market.

Matrix Composites & Engineering earned net profit of A$18.16 million in the year to June 30, compared with A$3.1 million in the prior year.

A consortium of 11 coalminers including BHP Billiton and Rio Tinto has increased its bid for Queensland Rail’s coal freight network to more than A$5 billion by increasing the offer over A$200 million. Queensland Premier Anna Bligh said the government is considering the offer.

Toll road operator Transurban reached has arranged funds for the acquisition of Lane Cove Tunnel.

National Australia Bank Ltd said its third quarter profit rose 22% as charges for bad debts decreased considerably. Unaudited cash earnings in the quarter ended June 30 were A$1.1 billion from A$900 million a year ago, the Melbourne-based bank said in a statement.

Sydney-based Cochlear Ltd said today its net income in the year ended Jun 30 climbed 19% to A$155.2 million from A$130.5 million in the prior year on sales rise of 6% to A$734.8 million.

Resource News

Mantle Mining Corp executed a non-binding agreement with Exergen Pty Ltd to develop its 100% owned Bacchus Marsh Brown Coal project in Victoria.

Tiaro Coal said that following completion of gravity surveys that started in May, a number of new targets have been identified for further exploration and drill testing.

Giralia Resources reported the remaining assay results from the first-pass resource drill out of the main range deposit at its wholly-owned McPhee Creek iron ore discovery in the Pilbara region.

Geothermal consultancy Hot Dry Rocks reported that Green Rock Energy’s Alkimos Permits GEP2 and GEP39, covering 340 square kilometers and located north of Perth, contains estimated geothermal resources amounting to 61,000 petajoules of stored heat.

Northern Star Resources reported a higher than estimate gold production at Paulsens goldmine in Western Australia as gold poured in July exceeded budget to a record 10,546 ounces.

Mineral sands explorer Diatreme Resources moved it’s A$311 million Cyclone project in the Eucla Basin a step forward by signing an agreement with China’s BaoTi Group.

Ivanhoe Australia plans to raise at least A$213 million through a one-for-four non-renounceable rights issue to proceed with its copper-gold and rhenium-molybdenum development plans in Queensland.

South Korea’s dominant power supplier, Korea Electric signed an accord with Australia’s Berkeley Resources for the joint development of the latter’s uranium project in Spain by providing both funding and a guaranteed sales channel.

Gainers & Losers

Isoft Group Ltd led the gainers in the ASX 200 with a gain of 10.34% to A$0.16 followed by Sundance Resources Ltd 6.67% to A$0.16 and Charter Hall Group 4% to A$0.65.

Eastern Star Gas Ltd led the losers with a decline of 7.1% to A$0.85 followed by Ausenco Ltd 6.69% to A$2.37 and Lynas Corp Ltd 6.32% to A$0.89.