Sydney Stocks Rally 2.1%; GDP Up 1.2%

Chandrasekhar Atreya
01 Sep, 2010
New York City

Stocks in Australia rallied after the GDP expanded at the fastest pace in three years at 1.2%. Exports rose 5.6% in the quarter and added 1.1 percentage point to the expansion. Manufacturing index increased at a slower pace in August. Paladin targets uranium exports to China.

[R]6:00 PM Sydney, Australia – Stocks in Australia rallied after the GDP expanded at the fastest pace in three years at 1.2%. Exports rose 5.6% in the quarter and added 1.1 percentage point to the expansion. Manufacturing index increased at a slower pace in August. Paladin targets uranium exports to China. Algae Tech plans to list in September.[/R]

Australian stocks rebounded after release of GDP data. The economy in the latest quarter expanded at 1.2%, better than expected.

The ASX 200 Index gained 2.08% or 91.50 to close at 4,495.70.

The Australian economy expanded at the fastest pace in three years in the quarter ended June, aided by continues boom in commodity export to China. The economy expanded at a better than expected rate of 1.2% in the last quarter.

Exports grew 5.6% in the quarter, adding 1.1 percentage points to the GDP, household spending increased 1.6 percentage points adding 0.9% to the GDP, today’s report showed.

Activity in the manufacturing sector expanded at a slower pace in August due largely a significantly slower growth in production and new orders, a survey shows.

The Australian Industry Group, PricewaterhouseCoopers performance of manufacturing index fell 2.7 index points to 51.7 points in August. The survey found that a strong mining construction activity kept the construction materials, basic metal, and transport sectors improving in August.

Consumer product sector also gained but the food and beverages and paper and printing sub sectors suffers falls. The survey also showed the employment sub index rose by 3.6 points in August to 51.3, reversing a decline in July. Wages growth was strong and this sub index grew 3.0 points to 71.

Cougar Energy, the company at the center of a water contamination scandal in Queensland, told the stock exchange it is uncertain whether it can continue performing as a going concern.

Perth-based Algae Tech Ltd said it is poised to list on the Australian Securities Exchange after inking two non-binding deals to deploy technology that can be used to generate biofuels from algae in Australia as well as in China.

The company is currently in the midst of an initial public offering of 37.5 million shares at a price of 20 cents each slated to close on September 17. The shares are expected to be listed on the ASX at the end of this month.

The company holds the exclusive global rights to the McConchie-Stroud Algae growth and harvesting system, which can produce products such as Algal oil and biomass that can be used to generate biofuels.

Paladin Energy Ltd said it is targeting uranium shipments to China in 2011, after signing an agreement with that nation’s second-biggest builder on nuclear facilities.

Africa-focused Paladin signed an agreement with Guangdong Nuclear Power Group Co for supply of uranium and aims to postpone supplies later in 2010 or early next year, CEO John Borshoff said in a telephonic interview Wednesday.

Resource News

Antofagasta, one of the world’s largest copper miners entered in Australia after joining forces with explorer Monax Mining in its Punt Hill copper-gold project in South Australia.

Sultan Corp resumed work to secure needed approvals in order to bring the Peelwood North copper-zinc project to production.

Icon Resources plans to spin off its Fitzroy copper-zinc project in Queensland to a new company, Fitzroy Resources with a view to list on the ASX.

IronClad Mining said it finalized a native title agreement that will pave the way for a new magnetite mine in South Australia. The agreement signed Tuesday would make way for development of its Wilcherry Hill project on the Eyre Peninsula.

MIL Resources reported “excellent results” from reconnaissance of rock and soil at Poi gold-copper project in Papua New Guinea.

Gainers & Losers

Virgin Blue Holdings Ltd led the gainers in the ASX 200 with a rally of 11.59% to A$0.385 followed by St Barbara Ltd 10.77% to A$0.36 and Gunns Ltd 7.94% to A$0.68.

Nufarm Ltd led the decliners in the index with a fall of 6.75% to A$3.59 followed by Isoft Group Ltd 3.57% to A$0.135 and James Hardie Industries SE 1.5% to A$5.25.