Australian Index Drops 1.6%; Macarthur Coal Production Falls 24%

Marcus Jacob
25 Jul, 2011
New York City

The benchmark index in Sydney dropped the most in the last ten days of trading as the U.S. lawmakers struggle to agree to revise the debt ceiling. Macarthur Coal Ltd said coal production declined 24% in the first half and dropped 22.5% in the last quarter in the aftermath of natural disasters.

[R]4:30 PM Sydney – The benchmark index in Sydney dropped the most in the last ten days of trading as the U.S. lawmakers struggle to agree to revise the debt ceiling. Macarthur Coal Ltd said coal production declined 24% in the first half and dropped 22.5% in the last quarter in the aftermath of natural disasters.[/R]

Stocks in Sydney trading declined on the growing worries that the U.S. lawmakers may not agree before the August 2 deadline to raise $1.43 trillion of debt ceiling.

The mood soured at the opening and the two widely tracked benchmarks steadily edged lower.

The ASX 200 index decreased 72.50 or 1.6% to 4,530.2 and All Ordinaries index dropped 1.5% or 70.30 to 4,604.90.

The benchmark index ASX 200 dropped the most in the last ten days as investors stayed on the sidelines as tensions rise among U.S. lawmakers in the run up to debt ceiling deadline.

The Australian dollar decreased to US$1.08. The Australian dollar hovered at a three-decade high against the British pound and American dollar.

Stock Movers

Energy related stocks closed lower after crude oil fell 98 cents after rising for the four day in a row and closed at US$98.89 a barrel.

Santos Ltd decreased 36 cents to $13.02, Woodside Petroleum fell 95 cents to $38.85 and Oil Search Limited decreased 17 cents to $6.73.

BHP Billiton Ltd fell 42 cents to $43.06 and Rio Tinto decreased 40 cents to $82.06. Newcrest Mining Ltd increased 3 cents to $40.35.

Premier Investments dropped 3.6% to $5.11 after it lowered earnings outlook for the current year and said it plans to close 50 underperforming stores.

Macarthur Coal Ltd closed unchanged at $15.50 after the miner reported production fell 24% to 3.81 million tons for the year ending in June.

The production declined 22.5% to 1.02 million tons in the last quarter ending in June as demand from Japanese steelmakers suffered.

The company was forced evoke weather related close for its delivery obligation for 147 days for delivery between Dec 3, 2010 and April 28.

Banks closed lower on the worries that the U.S. debt talks may end in an impasse forcing a shutdown of the U.S. government and may drag world financial markets.

Commonwealth Bank of Australia decreased 1.9% or 98 cents to $49.54 and National Australian Bank decreased 59 cents to $24.62. Westpac Banking Corp fell 34 cents to $21.26.

Transurban Group fell 3.3% to $5.18 after Canada Pension Investment Plan Investment Board sold its stake in the company for $903.3 million.