Australian Stocks Fall, Dollar Rises; Inflation Surges to 1.2%

Marcus Jacob
27 Apr, 2011
New York City

Australian stocks declined on the first day of trading since Thursday last week. The dollar gained after the latest read on inflation showed a surge in the first quarter on severe weather conditions. Macarthur Coal

[R]5:00 PM Sydney – Australian stocks declined on the first day of trading since Thursday last week. The dollar gained after the latest read on inflation showed a surge in the first quarter on severe weather conditions. Macarthur Coal’s first quarter production dropped 56%.[/R]

The ASX 200 index declined 40.9 or 0.83% to 4,872.90 and the broader All Ordinaries index declined 41.70 or 0.8% to 4,954.

The Australian dollar soared to US$1.083 after the latest read on consumer price inflation. Crude oil price increased 6 cents to $112.27 a barrel.

Food Price Lifts Inflation

The consumer price index increased 1.2% in the first quarter from the previous quarter and rose 3% from a year ago quarter.

Core inflation in the quarter increased 0.85% from the previous quarter and increased 2.25% from a year ago, according to the latest data from the Reserve Bank of Australia.

The surge in inflation stoked speculation that the central bank may be forced to revise inflation sooner than expected.

The latest bout of inflation was driven by 16% increase in vegetable prices and 14.5% increase in fruit prices after January floods and Cyclone Yasi in Queensland.

Macarthur Coal

Macarthur Coal said production of pulverized coal production in the first quarter dropped 56% and sales fell 61.2% to 476,300 tons on sever weather conditions in Queensland.

Production at Coppabella mine dropped 73.7% and at Moorvale mine fell 34.4%.

Stock Movers

BHP Billiton declined 87 cents or 1.8% to $46.45 and Rio Tinto fell 65 cents to $83.45.

Miners of gold and copper also closed mixed as gold declined but traded near its recent high of US$1,506 an ounce. Newcrest Mining fell 65 cents or 1.5% to $42.02.

CuDeco gained 56 cents or 18.12% to $3.65 after the company signed a sales agreement with the new shareholder China Oceanwide International Holdings.

Equinox Minerals increased 6.8% or 50 cents to $2.65 Barrick Gold agreed to acquire the company for $7 billion.

Lynas Corp declined 24 cents or 10% to $2.21 after the company postponed its extraordinary meeting to June as the company negotiates with Forge Resources. Forge declined 10 cents to $1.10.

Sims Metals Management soared 74 cents or 4.7% to $17.47 after the company estimated nine month net to surge 74% to $123 million.