Australian Index Drops 2.1%; Origin Energy Raises $2.3 Billion

Marcus Jacob
15 Mar, 2011
New York City

Stocks in Australia plunged in a regional sell off after Japan faced multiple crises. Prime Minister Kan warned of high level of radiation from a nuclear power plant and set off a panic that saw Nikkei index dropped to its second worst one-day loss of 14%.

[R]5:00 PM Sydney – Stocks in Australia plunged in a regional sell off after Japan faced multiple crisis. Prime Minister Kan warned of high level of radiation from a nuclear power plant and set off a panic that saw Nikkei index dropped to its second worst one-day loss of 14%.[/R]

Australian markets declined along with regional markets after Japan warned high radiation level from the Fukushima nuclear power plant.

The warning of high radiation along with a slight level of radiation detection in Tokyo started a panic that saw the Nikkei 225 Average plunged to its second worst one-day decline since the stock market crash of October 1987.

The Nikkei index dropped as much as 14% and managed to recover at close to a fall of 10.6% to 8,605.15.

Markets in Korea declined 2.4%, in Singapore fell 1.5% and in Shanghai plunged 1.4%.

The ASX 200 index dropped 2.1% or 97.70 to 4,528.70 and All Ordinaries Index declined 100.20 to 4,609.90.

The Australian dollar fell below the parity with the U.S. dollar to 99.48 U.S. cents and crude oil futures of the immediate month delivery increased 6 cents US$101.18.

Stock Movers

Resource stocks and in particular uranium miners plunged for the second day in a row. Paladin Energy dropped 17% to $3.26 and Peninsula Energy declined 30% to 5.9 cents.

BHP Billiton declined $1.12 to $42.97 and Rio Tinto dropped $1.74 to $77.41.

BC Iron declined 3 cents to $2.82 after Hong Kong based Regent Pacific withdrew its offer. The company terminated its $345 million offer for BC Iron after its major shareholder Consolidated Mines said it its “flatly opposed” to the deal.

The offer of $3.30 a share represented a 4% premium the close on January 21, the day before the offer was announced.

Origin Energy closed unchanged to $15.66 after the company chief said that nuclear crisis in Japan is likely to increase the demand for liquefied natural gas in the short term.

The natural gas retailer also completed the $2.3 billion raising at a price of $13 a share, 17% discount to the last trade. The funds will be used to lower the debt assumed at the time of purchase of $3.26 billion electricity assets privatized by the NSW government.

The company also confirmed that its underlying full-year profit is expected to increase 15% compared to a year ago.