Sydney Index Drops 1%; Temasek Sells Fortescue Stake

Chandrasekhar Atreya
20 Jan, 2011
New York City

Stocks in Sydney fell more than 1% led by drops in resource stocks followed by financial and energy stocks. Oz Minerals gold and copper 2010 output exceeds targets. Exports of metallurgical coal from Gladstone Port will commence on Friday.

[R]6:00 PM Sydney, Australia – Stocks in Sydney fell more than 1% led by drops in resource stocks followed by financial and energy stocks. Oz Minerals gold and copper 2010 output exceeds targets. Exports of metallurgical coal from Gladstone Port will commence on Friday.[/R]

Sydney index dropped more than 1% and the benchmark index fell to its largest single-day decline since November 23, led by drops in major resource stocks, financial and energy stocks.

The ASX 200 Index fell 1.05% or 50.90 to close at 4,783.70 and the Australian dollar closed at 99.34 U.S cents in Sydney today.

BHP Billiton said today it expects the flooding in Queensland to impact its coking coal output, sales and costs for the remainder of the fiscal year to June 30, after reporting a 30% drop in production in the quarter ended December.

The company said total coking coal production declined 12% to 7.8 million tons in the quarter to December. Iron ore output rose 4% to 33.7 million tons in the same period.

Adelaide-based Santos cut its estimates of natural gas reserves at three of its fields in the Otway Basin off the southeast coast of Australia by more than 25%, the second such downgrade within a year at a field in this region.

Santos also reported sales increased 13% to $601 million for the quarter ended December, despite the reduction in output across the Cooper Basin due to floods.

Deliveries of metallurgical coal for export from Gladstone Port through the damaged Blackwater rail line will resume on Friday.

Melbourne airport registered a record number of travelers in 2010 helped by a big jump in the number of Chinese visitors and English cricket fans. A record 27.7 million travelers, a 10% surge on the previous year, passed through Melbourne Airport in 2010.

Chinese visitors increased 26% followed by 20% more visitors from the U.K.

Arafura Resources is making all efforts to sell its rare earths to Japan, the latest challenge to China’s domination in this important raw material.

“There is a lot of interest in Japan for our product,” said Steve Ward, the CEO of the company after speaking at a conference for Japan’s Metal Research Bureau in Tokyo last month.

Sydney Airport reported today that its earnings before interest, tax depreciation and amortization, was A$773 million in the year ended December 31, 2010 from A$689.3 million in the previous year.

“Ongoing cost discipline has resulted in improved margins and contributed to the strong result as conditions steadily improved through the year following the impact of the global financial crisis in 2009,” Chief Executive Kerrie Mather said.

Oz Minerals said today its copper and gold production in 2010 exceeded targets the company had set. Copper output for the fourth quarter was 25,185 tons and for the year 112,171 tons, beating the company’s guidance of 100,000 to 110,000 tons.

Gold production was 54,128 ounces in the fourth quarter and 196,400 ounces for the year, ahead of annual estimate of 185,000 ounces.

Stock Movers

Fortescue Metals Group was the worst performer, down 7.79% to A$6.63 after Singapore Investment house Temasek sold a 4.1% stake of the miner for A$879 million today.

BHP Billiton fell 1.87% to A$45.19 after it said it had declared force majeure over its coal exports from mines in Queensland significantly affected by floods and rain.

Rio Tinto dropped 2.34% to A$85.57.

Oz Minerals fell 3.37% to A$1.72 despite output of copper and gold exceeded its 2010 target.

While retailers were mixed banking stocks were down.

Myer gained 4 cents to A$3.73, David Jones was one cent higher at A$4.85 while Harvey Newman was down 8 cents to A$3.14.

NAB fell 1.02% to A$24.15, Westpac fell 22 cents to A$22.39, ANZ dropped 18 cents to A$23.06 and Commonwealth Bank was 10 cents lower at A$51.66.