Australian Stocks in 3-day Rally; Borat, Downer, Monadelphous Rise

Marcus Jacob
21 Feb, 2012
New York City

Australian stocks closed higher for the third day in a row as resource stocks led the gainers. Strong earnings from Downer EDI, Monadelphous Group, iiNet Limited and Borat Longyear lifted the confidence.

[R]8:00 PM Sydney – Australian stocks closed higher for the third day in a row as resource stocks led the gainers. Strong earnings from Downer EDI, Monadelphous Group, iiNet Limited and Borat Longyear lifted the confidence.[/R]

Australian stocks traded higher in the late afternoon after the announcement of the Greek agreement. Mining and resources linked companies led the advance and domestic earnings also boosted the confidence.

The long awaited agreement to release $170 billion for Greece accompanies with tough conditions and strict supervision and also increase private sector bond holdings by 53.5%.

The new agreement will cut Greece’s debt by $100 billion and offer new loans at below market rates but Greece is still facing serious challenges in implementing reforms and meeting its tax collection targets.

The ASX 200 index closed higher 35.1 to 4,291.2 and All Ordinaries index added 35.4 to 4,368.2.

In trading, volume was flat at 2 billion shares worth $4.7 billion. Of the shares traded, 577 increased, 444 decreased and 391 were unchanged.

The Australian dollar edged higher to close at $1.0721.

Monadelphous Group, Borat Longyear, Downer EDI, iiNet Limited and CFS Retail Property Trust reported strong earnings.

Stock Movers

Miners and resources stocks traded higher after the announcement of the Greek agreement.

BHP Billiton Ltd rose 42 cents to $36.44, Rio Tinto Ltd added $1.12 cents to $69.16 and Fortescue Metals Group added 7 cents to $5.52.

Lynas Corporation Limited closed up 2 cents to $1.30 and Iluka Resources increased 34 cents to $17.21. Newcrest Mining rose 20 cents to $35.10.

Monadelphous Group Limited increased 3% to $23.86 after the engineering group reported first half net increased 26% to record net profit.

Oil Search Limited increased 17 cents to $6.72, Santos Limited rose 12 cents at $14.12 and Woodside Petroleum increased 44 cents to $35.95.

Borat Longyear Ltd surged 8.3% to $3.93 after the mining services provider reported full year record net profit soared 89% to $149 million and revenues surged 37%.

Downer EDI increased 22 cents or 5.9% to $3.94 after the engineering company said swung to net profit in the first half to $85 million from a loss of $105 million in the year ago. Mining division growth in sales boosted earnings.

OneSteel Limited increased 9 cents to 82 cents after the steel maker reported first half net loss of $74 million on $130 million impairment charges in the steel business. The company also plans to eliminate 430 jobs.

Commonwealth Bank of Australia increased 37 cents to $49.47, Westpac added 1 cent to $20.66 and NAB increased 22 cents to $23.40. ANZ increased 5 cent to $22.

David Jones Limited increased 6 cents to $2.53 and Harvey Norman Holdings added 6 cents to $2.12. Woolworths increased 14 cents to $25.31.

iiNet Limited increased 4 cents to $3.16 after the Internet access provider said first half profit increased 17% to $14.4 million and the number of subscribers grew to 860,000.

Qantas Airways Ltd closed flat at $1.68, Virgin Australia closed up 0.5 cent at 36 cents and Flight Centre increased 77 cents to $21.50.

QR National closed up 14 cents to $3.93.