Australian Stocks Extend Gains; BHP Iron Ore Out Put Up 23%

Marcus Jacob
18 Jan, 2012
New York City

Australian stocks extended gains and traded at a 5-week high for the second day in a row. BHP Billiton said iron ore production in the half year to December increased 23% to 80.6 million tons.

[R]8:00 PM Sydney – Australian stocks extended gains and traded at a 5-week high for the second day in a row. BHP Billiton said iron ore production in the half year to December increased 23% to 80.6 million tons.[/R]

Australian stocks braved international economic data and sentiment after BHP reported strong production in the first half.

The World Bank lowered its economic growth outlook and said world economy is may face another financial crisis that may be deeper and protracted compared to the last crisis in 2008.

The U.S. controlled global banking institution estimated world growth in 2012 to decline to 2.5% from 3.6% and the euro area to shrink by 0.3%. The bank lowered its growth estimate for the U.S. to 2.2% from 2.9%, for China to 8.4% from 9.2% and for India to 6.5% from 8.4%.

The ASX 200 index closed up 2.3 or to 4,217.9 and All Ordinaries index increased 2.9 to 4,280.6.

The Australian dollar edged higher 0.1% and closed at US$1.035.

Stock Movers

BHP Billiton Ltd added 30 cents to $37 and Rio Tinto Ltd increased $0.90 to $66.60.

BHP Billiton said first half iron ore production increased 23% from a year ago period to 80.6 million tons. The company also said its Pilbara region mines in Western Australia hit a record annual rate of 178 million tons.

BHP also reported 36% increase in petroleum products in the first half from a year ago to 109.4 million barrels of oil equivalent on the acquisition of shale gas interests in the U.S.

The company is scheduled to report its earnings on February 8 and relies on 40% of earnings from the sale of iron ore. BHP has targeted production of more than 220 million tons of iron ore in 2014.

Fortescue Metals Group increased 25 cents to $5.05, Lynas Corporation Limited closed up 4 cents to $1.06 and Iluka Resources increased 22 cents to $16.50. Newcrest Mining added 36 cents to $32.77.

Oil Search Limited traded down 6 cent to $6.48, Santos Limited closed unchanged at $13.21 and Woodside Petroleum increased 46 cents to $34.11.

Commonwealth Bank of Australia traded flat at $49.84 and National Australia Bank fell 14 cent to $23.66. ANZ declined 26 cents to $20.79 and Westpac inched lower 9 cents to $20.57.

David Jones Limited closed up 4 cents to $2.36 and Wesfarmers Limited decreased 7 cent to $30.48. Harvey Norman Holdings closed down 1 cent $1.98.

Woolworths Limited closed down 10 cents to $25.47 and JB Hi-Fi Limited decreased $0.11 to $11.89. Billabong International Ltd fell 1 cent to $1.81 and Kathmandu closed down 3 cent to $1.24.

Qantas Airways Ltd added 3 cents to $1.53, Virgin Australia was unchanged at 30.5 cents and Flight Centre added 21 cents to $18.36.

QBE Insurance Group Limited decreased $0.22 to $11.48 and Insurance Australia Group declined 3 cents to $2.95.

QR National fell 1 cent to $3.74.