Australian Index at 5-day High; Qantas Estimates $550 Million Net

Marcus Jacob
22 Jun, 2011
New York City

Stocks in Australia rebounded after a weak trading in the last five days. Resources linked stocks gained after Greek government won a parliament vote of confidence. Qantas Airways estimated full year profit of as much as $550 million but international operations continue to make losses.

[R]5:00 PM Sydney – Stocks in Australia rebounded after a weak trading in the last five days. Resources linked stocks gained after Greek government won a parliament vote of confidence. Qantas Airways estimated full year profit of as much as $550 million but international operations continue to make losses.[/R]

Investors bid up stocks and the benchmark index hit 5-day intra-day high after Greek government won the closely watched confidence vote.

Prime Minister George Papandreou survived the vote of confidence in parliament by 155 to 143. The vote paves the path for the clearance of austerity measures by July 3 and sets the process in motion for privatization.

The ASX 200 index increased 24.40 or 0.5% to 4,532.6 and All Ordinaries index added 0.6% 25.6 to 4,590.8. Markets in Asia also tracked higher after the Greek confidence vote.

The Australian dollar increased to US$1.059 and crude oil increased 47 cents to US$93.70.

In trading, turnover surged to 4.38 billion shares worth $5.4 billion. Of the stocks traded, 718 stocks increased, 435 decreased and 389 closed unchanged.

Stock Movers

Stocks in resources and energy and banking sector led the gainers.

BHP Billiton increased 46 cents to $42.26 and Rio Tinto increased $1.15 to $79.79.

Aquila Resources declined 4 cents to $7.31 as the company and its partner Brazil based Vale seek a court verdict on their joint venture.

ANZ increased 17 cents to $21.72, National Australia Bank increased 4 cents to $24.68 and Commonwealth Bank of Australia added 35 cents to $50.61. Westpac gained 9 cents to $21.52.

Qantas Airways added 0.5 cents to $1.83 after the airline company estimated full-year pre-tax profit between $500 million and $550 million.

The airline is expected to lose $200 million in its international operations and will take a charge of $206 million related to natural disasters.

The company also signed an agreement for the compensation payment of $95 million with Rolls-Royce to cover the A380 engine explosion near Singapore last year. A separate insurance covered the repair cost of $135 million for the plane.

The airline also noticed that international operations are hurt by the competition from the Middle East carriers for its long haul business.