Australian Stocks Rebound 2%; Qantas CEO Grilled

Marcus Jacob
04 Nov, 2011
New York City

Australian stocks rebounded 2% as commodities prices rose and Asian markets closed higher. After a tumultuous day in Greece, prime minister agreed to back away from the referendum after opposition party backed EU deal. Qantas plans to turn Europe business profitable in three three to five years.

[R]7:00 PM Sydney – Australian stocks rebounded more than 2% as commodities prices rose and Asian markets closed higher. After a tumultuous day in Greece, prime minister agreed to back away from the referendum after opposition party backed EU deal. Qantas plans to turn long haul business to Europe profitable in three to five years.[/R]

Australian stocks surged following international events and commodities prices rebounded.

After a tumultuous day in Greek politics, Prime Minister George Papandreou said he is prepared to step down after a confidence vote later on Friday and form a unity government after the opposition party leader Antonis Samaras agreed to back the EU bailout package and its conditions.

Greek Prime Minister also confirmed that after the agreement with the opposition party leader to support the EU bailout. Antonis Samaras of the New Democracy said he never rejected the deal with the EU but only the government’s handling of it.

The decision reached in the early afternoon in Athens also lifted sentiment across Europe and in Asian markets trading.

The ASX 200 index gained 109.30 or 2.6% to 4,281.10 and All Ordinaries index rose 2.5% or 105.00 to 4,343.

The Australian dollar fell 0.23% to US$1.039.

Stock Movers

BHP Billiton Ltd closed up $1.41 to $37.95 and Rio Tinto Ltd increased $3.52 to $69.97.

Fortescue Metals Group increased 37 cents to $5.08, Lynas Corporation Limited closed up 2 cents to $1.15 and Iluka Resources rose 95 cents to $17.08.

Boral Ltd rebounded 8 cents to $3.68 and a day ago the building materials supplier said its current fiscal year earnings will be below expectations.

Oil Search Limited increased 5 cents to $6.43, Santos Limited rose 44 cents to $13.12 and Woodside Petroleum rose 47 cents to $36.67.

Cochlear Limited fell $0.89 to $53.

Commonwealth Bank of Australia closed up $1.02 to $49.03 and National Australia Bank increased 52 cents to $25.19. ANZ edged up 53 to $21.02. Westpac added 57 cent to $22.08.

David Jones Limited closed up 4 cents to $3.21 and Wesfarmers Limited increased 63 cent to $32.03.

Woolworths Limited increased 39 cent to $24.30 and James Hardie Industries SE increased 20 cents to $6.08.

Qantas Airways Ltd closed up 4 cents at $1.62, Virgin Blue closed up 0.01 cent at 38.5 cents but Flight Centre rose 76 cents to $19.83.

Alan Joyce, Chief Executive of Qantas said at a Senate hearing that “we fundamentally believe that international long haul business is a key part of the Qantas Group” and “we have to find a way to fix that business.”

He added that 38% of capital spending of $2.5 billion a year that we spend is going to support the long haul business and “we are not going to walk away from that business.”

He added that our restructuring plan will allow us to turnaround the international long haul business in the three to five years and make it profitable.

Joyce was grilled about his decision to ground the fleet and said it was his decision to do so last weekend.

Joyce added he “has the complete operational discretion” to ground the fleet and it was “unanimously endorsed by the board.”