Australian Stocks Extend Gains; Qantas Strike Cost A$68 Million

Marcus Jacob
28 Oct, 2011
New York City

Australian stocks extended gains for the second day and the Australian dollar declined a fraction. Commodities closed mixed in Asian trading. Qantas Airways strike has cost the company A$68 million so far and A$15 million a week. Nearly 10,000 travelers are affected and seven planes are grounded.

[R]6:00 PM Sydney – Australian stocks extended gains for the second day and the Australian dollar declined a fraction. Commodities closed mixed in Asian trading. Qantas Airways strike has cost the company $68 million so far and $15 million a week. Nearly 10,000 travelers are affected and seven planes are grounded.[/R]

Australian stocks extended gains for the second day in a row after European leaders finalized their debt negotiations and required banks to raise capital.

The growing list of skeptics cautioned that the quick embrace of the plan by the market may lead to disappointments later. There are a number of questions on how Greek debt restructuring will work and if enough people do not sign up for the voluntary exchange the pact could easily unravel.

Investors are still not convinced how the European Union will leverage its rescue fund from the current €440 billion to €1 trillion. French President Sarkozy is expected urge China and Japan to participate in the fund.

The ASX 200 index increased 0.1% or 5.1 to 4,353.3 and All Ordinaries index gained 0.2% or 7.5 to 4,411.4.

The Australian dollar fell 0.5% to US$1.066.

In trading, 1.3 billion shares changed hands worth $4.25 billion. Of the shares traded 667 increased, 272 decreased and 313 were unchanged.

Stock Movers

BHP Billiton Ltd closed up $0.34 to $38.69 and Rio Tinto Ltd added $0.52 to $70.22.

Fortescue Metals decreased 3 cents to $, Lynas Corporation Limited added 2 cents to $1.30 and Iluka Resources gained 42 cents to $16.74.

Oil Search Limited increased 5 cents to $6.47, Santos Limited fell 11 cents to $13.20 and Woodside Petroleum added 20 cents to $36.

Cochlear Limited fell $0.22 to $58.78.

Commonwealth Bank of Australia closed down 3 cents to $49.96 and National Australia Bank increased 12 cents to $25.99. ANZ edged up 8 to $22.08. Westpac fell 8 cents to $22.68.

David Jones Limited closed down 1 cent to $3.52 and Wesfarmers Limited increased 1 cent to $32.69.

Woolworths Limited decreased 26 cents to $23.82 and James Hardie Industries SE increased 6 cents to $6.31. Treasury Wine Estate closed flat at $3.88.

Qantas Airways Ltd closed down 3 cents to $1.54 and close at a new low in the last eleven years as the company battles with workers and pilots strike.

The company said at the annual general meeting that lost revenues from the strike has surpassed the losses of $68 million at the time of the volcanic ash from Chile earlier in the year. The company estimated $15 million a loss a week if the strike continues.

The company estimated yields in the first half of the current fiscal year to increase between 4% and 6% from a year ago period and capacity to rise between 6% and 7%.

So far the company has grounded 7 planes and 500 flights and the number of passengers forced to cancel their travel plans increased to 10,000.

Ten Network Holdings Limited decreased 1 cent to 91.50 cents and yesterday the television broadcaster reported 91% decline in profit and also released a plan to turn around its business.