Australian Stocks in 4-day Rally; BHP Wins Olympic Dam Expansion

Marcus Jacob
10 Oct, 2011
New York City

Australian indexes gained for the fourth day in a row and banks led the gainers. BHP Billiton won governments approval to expand its open cut mining operation Olympic Dam. Qantas was forced to cancel 40 flights as engineers union delayed the strike to Friday and threatened more work stoppages.

[R]6:00 PM Sydney – Australian stocks advanced for the fourth day in a row and resource stocks and banks led the gainers. BHP Billiton won governments approval to expand its open cut mining operation Olympic Dam. Qantas was forced to cancel 40 flights as engineers union delayed the strike to Friday and threatened more work stoppages.[/R]

Australian stocks extended gains for the fourth day in a row after European leaders promised more support for the bank recapitalization plans.

German and French leaders promised to focus on the issue and support the measure at the next meeting of G20 nations in November.

Separately, Belgium and France worked to divvy up the assets of failed Dexia SA bank. The bank needed second bailout in three years after it accumulated losses in the U.S. sub-prime markets in 2008 and sovereigns bonds of Greece, Spain, Portugal and Ireland.

Federal, the South Australia and Northern Territory governments approved the expansion of the largest open cut mining operation Olympic Dam controlled by BHP Billiton that may create as many as 13,000 jobs.

The ASX 200 index increased 38.1 or 0.9% to 4,201 and All Ordinaries index rose 37.3 or 0.9% to 4,262.50.

The Australian dollar gained 1.6% to US$0.993 and gold decreased US$7.00 to US$1,658.02.

In trading, 1.54 billion shares changed hands worth $4.23 billion and 563 stocks increased, 400 declined and 333 were unchanged.

Stock Movers

Fairfax Media closed unchanged at 89.50 cents after the company agreed to sell its regional radio broadcasting operations to Grant Broadcasters.

Higher dollar dragged companies with international operations lower. ResMed declined 5 cents to $3.02.

Extract Resources soared 10% to 82 cents on the speculation that the company may receive a bid from China based Guandong Nuclear Power.

BHP Billiton Ltd decreased $0.10 to $37.10 and federal and regional governments approved the expansion of Olympic Dam uranium and copper mine in South Australia. The approval still requires the miner to obtain 600 licenses that meet 150 conditions and will generate 13,000 jobs.

Rio Tinto Ltd added $1.00 to $67.40. Newcrest Mining Limited increased $0.11 to $35.87. Lynas Corp added 8 cents to $1.26.

Fortescue Metals increased 4 cents to $4.94. Iluka Resources increased $0.30 to $15.40 and Paladin Energy Ltd increased 16 cents to $1.71.

Oil Search Limited increased 2 cents to $5.95, Santos Limited added 31 cents to $12.33 and Woodside Petroleum added $0.47 to $35.55.

Commonwealth Bank of Australia closed up $0.46 to $46.71 and National Australia Bank added $0.29 to $24.05. ANZ edged up $0.29 to $21.00. Westpac increased $0.46 to $21.70. Macquarie Group added $0.38 to $24.44.

Qantas Airways Limited closed up 2 cents to $1.52 and engineers delayed the planned walkout for four hours today to Friday. The last minute decision b the union still forced the airline to cancel 40 flights and delay 24 flights and affected 11,000 passengers.

David Jones Limited closed up 4 cents to $2.98 and Wesfarmers increased $0.27 to $31.59.

Woolworths Limited increased 22 cents to $24.85. James Hardie Industries SE added 3 cents to $5.97.

Stockland rose 3 cents to $3.06 and Westfield Group closed unchanged at $7.82.