Australian Indexes Down 1.6%; Resource Stocks, Banks Decline

Marcus Jacob
19 Sep, 2011
New York City

Stocks in Australia turned lower following the declines in the Asian markets. European ministers failed to release the

[R]5:30 PM Sydney – Stocks in Australia turned lower following the declines in the Asian markets. European ministers failed to release the €8 billion to Greece and delayed the decision to till the next meeting in October. Banks closed lower and resource stocks fell.[/R]

The Australian indexes fell 1.6% and market indexes in Asia declined more than 1%. The regional sell off was sparked after the weekend of meeting of finance ministers in the euro zone failed to produce any specific steps to stem the Greek crisis.

The lack of agreement among ministers highlighted the differing priorities in the region and confirmed that Greece heading to a default.

The ministers could not agree on the size and the nature of the collateral for Greek debt and also were concerned by the Greece’s lack of progress in trimming its expenses and balancing the budget.

The meeting of European finance ministers delayed the release the next tranche of bailout of €8 billion for Greece until October. Greece needs the payment to avoid defaulting on its debt by mid-October.

Greece has recently lifted its deficit target to 8.3% from 7.4% and the economy is expected to shrink by 5.3% from 3.8%.

The ASX 200 index fell 67.90 or 1.6% to 4,081.5 and All Ordinaries index declined 65.8 or 1.6% to 4,164.1.

The Australian dollar fell 1.3% to US$1.022 and fetched 78.69 yen compared to 79.40 yen yesterday. The spot price of gold rose $57.09 to US$1,822.69 per ounce.

In trading, stock volume increased to 2.32 billion and shares worth $5.15 billion changed hands.

Stock Movers

Cochlear, the maker of hearing aid, rebounded 5.6% after nearly falling 30% last week on a recall of a range of products.

BHP Billiton Ltd decreased $0.63 to $37.60 and Rio Tinto fell $1.07 to $70.20. Newcrest Mining Limited rose 6 cents to $38.17 and Atlas Iron decreased 14 cents to $3.64.

Iluka Resources decreased 11 cents to $15.20.

Sundance Resources decreased 1.5 cents to 45.5 cents and on Friday surged 7% on the media reports that China based Hanlong Mining is expected to go ahead with its $1.3 billion bid for the company despite an ongoing insider trading investigation at Hanlong.

Paladin Energy Ltd decreased 7 cents to $1.58 after the company said on Friday its uranium production resumed at its mine in Malawi after the infrastructure upgrade.

Oil Search Limited decreased 15 cents to $5.95, Santos Limited fell 20 cents to $11.25 and Woodside Petroleum declined $0.85 to $33.40. Origin Energy decreased 54 cents to $12.89.

Commonwealth Bank of Australia decreased $0.63 to $44.95 and National Australia Bank fell 42 cents to $22.44. ANZ declined 39 cents to $19.41. Westpac fell 41 cents to $19.51.

Macquarie Group decreased $0.72 to $21.79.

Qantas Airways Limited fell 5 cent to $1.54 and Telstra closed unchanged at $3.06.

David Jones increased 1 cent to $2.70 and Wesfarmers fell 27 cents to $30.46.