Australian Rates on Hold; Sundance Resources Soars 10%

Marcus Jacob
04 Oct, 2011
New York City

Australian markets dropped nearly 1% on the weakening global scenario and rising tensions in the euro zone. Resources linked stocks closed lower. Reserve Bank of Australia left its key lending rate at 4.75%. Sundance Resources soars on a revised offer from Hanlong.

[R]5:30 PM Sydney – Australian markets dropped nearly 1% on the weakening global scenario and rising tensions in the euro zone. Resources linked stocks closed lower. Reserve Bank of Australia left its key lending rate at 4.75%. Sundance Resources soars on a revised offer from Hanlong.[/R]

Australian stocks declined for the second day in a row after Greek talks dragged and the struggling nation slides closer to a default.

The Reserve Bank left its key lending rate on hold at 4.75%. The rates have been on hold for eleven months in a row.

The RBA Governor Glenn Stevens said cash rate target will remain at 4.75% in October and cited weakening global economic scenario and highlighted improving inflation picture.

Economists surveyed by 123jump.com after the cut estimated a rate cut as early as in November followed by another cut in December as the central bank has shifted its stance from fighting inflation and worry about the falling demand and business confidence.

The ASX 200 index decreased 24.9 or 0.6% to 3,872.1 and All Ordinaries index rose 25.1 or 0.6% to 3,935.6.

The Australian dollar fell 1.1% to US$0.942 and the spot price of gold in Sydney declined US$29.52 to US$1,663.40 an ounce.

In trading, 2.19 billion shares changed hands worth $5.49 billion and six in ten traded stocks declined.

Stock Movers

Sundance Resources rose 5.8% to 45.5 cents after China based Sichuan Hanlong Group revised its offer to $1.65 billion or 57 cents a share. The offer is 43% premium from the last close price and higher than the 50 cents a share previous offer.

BHP Billiton Ltd decreased $0.29 to $33.86 and Rio Tinto Ltd declined $0.30 to $59. Newcrest Mining Limited increased $0.34 to $33.90. Lynas Corp fell 3 cents to $0.94.

Fortescue Metals decreased 3 cents to $4.06. Iluka Resources increased 48 cents to $12.62 and Paladin Energy Ltd decreased 5 cents to $1.11.

Oil Search Limited decreased 3 cent to $5.47, Santos Limited declined 20 cents to $10.88 and Woodside Petroleum fell $0.11 to $31.51.

Commonwealth Bank of Australia decreased $0.37 to $43.51 and National Australia Bank fell $0.17 to $21.46. ANZ edged up $0.04 to $18.98. Westpac decreased $0.16 to $19.34.

Qantas Airways Limited closed unchanged at $1.38.

David Jones Limited decreased 19 cent to $2.84 and Wesfarmers decreased $0.77 to $30.04.

Woolworths Limited decreased 9 cents to $24.41. James Hardie Industries SE decreased 10 cents to $5.45.

Stockland rose 10 cents to $2.96 and Westfield Group decreased 23 cents to $7.39. Goodman Group edged up 0.025 cents to $0.55.