Australian Index Drops 1.3%; Oakjee Port Sale Approved

Marcus Jacob
28 Dec, 2011
New York City

Australian stocks declined and the benchmark index fell 1.3% and retail sales in the holiday period were estimated to be flat or declined slightly. Australia approved the sale of Murchison Metals stake in Western Australia port and rail project to Mitsubishi.

[R]8:00 PM Sydney – Australian stocks declined and the benchmark index fell 1.3% and retail sales in the holiday period were estimated to be flat or declined slightly. Australia approved the sale of Murchison Metals stake in Western Australia port and rail project to Mitsubishi.[/R]

Australian stocks traded lower in weak volume as investors stayed away for the year end’s holiday and awaited the results of the Italian bond auction.

Late in the evening, Italy completed the sale of €10.7 billion short terms bonds at a sharply lower yield of 3.2% from the previous auction of 6.5% in November.

The ASX 200 index closed down 1.2% or 51.6 to 4,088.8 and All Ordinaries index decreased 50.4 or 1.2% to 4,141.7. In trading, 849 million shares changed hands worth $1.9 billion.

The Australian dollar edged lower 0.3% and closed at US$1.018.

Retail stocks were in focus as the industry association said that holiday sales to the Christmas Day were flat or declined slightly from a year ago as the strong dollar drove most Australians to shop abroad.

Australian retailers have announced weak same store sales in the last four week period and strong dollar and access to Internet retailers has shifted spending to overseas retailers who offer better merchandising selection and cheaper prices.

Stock Movers

Arc Exploration Limited dropped 10% to 0.9 cents after locals protested at its mining operation in Indonesia.

BHP Billiton Ltd fell 58 cents to $34.57 and Rio Tinto Ltd decreased $1.32 to $60.52.

Fortescue Metals Group increased 3 cents to $4.49, Lynas Corporation Limited closed down 4 cent to $1.12 and Iluka Resources declined $0.29 to $15.40.

Murchison Metals increased 1.5 cents to 44 cents after the Foreign Investment Review Board approved the company’s stake sale in Oakjee port and rail project to Mitsubishi for $325 million. In addition, Western Australia’s government also extended the project completion beyond December 31 but also canceled the exclusive right to develop port and rail project development.

Oil Search Limited traded down 6 cents to $6.31, Santos Limited declined 8 cents to $12.28 and Woodside Petroleum decreased $0.30 cents to $31.23.

Commonwealth Bank of Australia decreased 50 cents to $49.31 and National Australia Bank fell 27 cents to $23.43. ANZ edged down 12 cents to $20.73. Westpac inched lower 41 cents to $20.13.

Cochlear rose $0.40 to $62.60 and the stocks traded at a six week high.

David Jones Limited decreased 5 cents to $2.38 and Wesfarmers Limited decreased 27 cent to $30.02. Harvey Norman Holdings closed down 4 cent to $1.81.

Woolworths Limited closed down 22 cents to $25.28 and JB Hi-Fi Limited decreased $0.29 to $11.35.

Billabong International Ltd added 2 cents to $1.80 and Kathmandu rebounded 9 cents to $1.32 after a day ago the retailer issued sales and earnings warnings.

Qantas Airways Ltd closed up 3 cents to $1.50, Virgin Australia closed unchanged at 35.5 cents and Flight Centre declined $0.26 to $17.34.

QBE Insurance Group Limited increased 19 cents to $13.25 and QR National added 7 cents to $3.50.