Australian Index Soars 1%, Dollar 10-week High; Foxtel Bid Rejected

Marcus Jacob
22 Jul, 2011
New York City

Stocks in Sydney surged after the euro-zone ministers agreed on Greek bailout conditions and the overnight reports suggested a progress in the U.S. debt talks. Resource stocks gained after oil inched towards $100. Austar plunged 16% after Foxtel

[R]4:30 PM Sydney – Stocks in Sydney surged after the euro-zone ministers agreed on Greek bailout conditions and the overnight reports suggested a progress in the U.S. debt talks. Resource stocks gained after oil inched towards $100. Austar plunged 16% after Foxtel’s $2.5 billion bid was rejected by the regulators.[/R]

Stocks in Sydney closed higher after a tangible progress in debt talks in the U.S. and the euro-zone.

U.S. lawmakers regained a new momentum and France and Germany negotiated a compromise that involved private lenders and selective default of Greek debt.

The euro-zone countries and the International Monetary Fund will lend an additional €109 billion with the private financial sector making its own contribution of €50 billion. The package comes in addition to the €110 billion Greece received as part of its first bailout in 2010.

During the summit, ministers and regulators decided to lengthen the maturity of future loans to Greece from the current 7.5 years to a minimum of 15 years and up to 30 years with a grace period of 10 years.

The positive momentum lifted sentiment in the currency and commodities markets. Oil traded near $100 a barrel and copper inched up 1%. Gold edged lower 0.6%.

The ASX 200 index increased 47.90 or 1% to 4,603.9 and All Ordinaries index added 47.9 or 1% to 4,674.20.

The Australian dollar increased 0.4% to US$1.087. Spot gold in Sydney trading increased $3.50 to US$1,598.70 an ounce.

In trading, turnover decreased to 2.23 billion shares worth $4.73 billion and 579 shares closed higher, 472 declined and 376 were unchanged.

Stock Movers

Banks closed higher after the euro-zone ministers agreed to bailout Greece with new loans of €109 billion with the private financial sector making its own contribution of €50 billion. The package comes in addition to the €110 billion Greece received as part of its first bailout in 2010.

ANZ added 47 cents to $21.73 and National Australia Bank Ltd gained 62 cents to $25.22. Commonwealth Bank of Australia added 78 cents or 1.6% to $50.52.

Macquarie Group increased 3.3% or 96 cents to $30.06.

BHP Billiton Ltd decreased 15 cents to $43.43 and Rio Tinto Ltd added 0.2% or 16 cents to $82.50.

Energy sector closed higher after crude oil inched to $100 a barrel in New York trading. Santos Ltd added 7 cents to $13.38 and Woodside Petroleum Ltd edged 15 cents lower to $39.80.

David Jones Ltd increased 7 cents to $3.19 and Woolworths Limited jumped 21 cents to $27.84. Myer Holdings added 10 cents to $2.50.

ConnectEast soared 20% to 54 cents after it proposed to merge with its largest shareholder Horizon Roads.

Austar United Communications dropped 16% to $1.08 after competition regulator in a preliminary ruling rejected $2.5 billion merger with Foxtel.

The commissioner Graeme Samuel said at the present time, “the acquisition is likely to lead a substantial lessening of competition in a number of markets related to content acquisition and distribution.”

Austar is controlled 50% by Telstra and News Corp and Consolidated Media Holdings own 25% each.