BHP, Rio Cautious on Chinese Iron Ore Demand; Australian Stocks Weak

Marcus Jacob
20 Mar, 2012
New York City

Australian stocks edged lower and five-month old rally in stocks appears to be losing steam. Resource stocks were weak after cautious comments at from BHP and Rio Tinto at an industry conference.

[R]8:00 PM Sydney – Australian stocks edged lower and five-month old rally in stocks appears to be losing steam. Resource stocks were weak after cautious comments at from BHP and Rio Tinto at an industry conference.[/R]

Australian stocks were under pressures after the five month old rally in world markets is beginning to lose steam and cautious views from BHP and Rio Tinto.

The ASX 200 index decreased 15.80 to 4,275.00. All Ordinaries index decreased 15.62 to 4,365.59.

In trading, stock turnover was 2.1 billion shares worth $4.6 billion and 430 stocks closed higher, 586 declined and 426 were unchanged.

The head of iron ore division of BHP, Ian Ashby said at an industry conference in Perth that China’s demand “growth is going to flatten off” but maintained that there still opportunities to grow the business.

David Joyce, managing director of expansion projects at Rio Tinto said at the same conference that China’s economic growth is slowing but will still remain “solid” and China is heading for soft landing and not a sharp slowdown.

Stock Movers

Resources stocks were lower after BHP said growth in Chinese demand appears to be leveling off but retained the bullish outlook for the commodities demand.

BHP Billiton Ltd fell 4 cents to $35.31 and Rio Tinto Ltd decreased 24 cents to $65.61. Fortescue Metals Group fell 6 cents to $5.92.

Lynas Corporation Limited decreased 6 cent to $1.16 and Iluka Resources closed up 43 cents to $17.23.

Newcrest Mining decreased 34 cents to $29.32 and Kingsgate decreased 10 cents to $6.33.

Oil Search Limited rose 1 cent to $6.97, Santos Limited fell 2 cents at $14.51 and Woodside Petroleum increased 35 cents to $35.32.

Commonwealth Bank of Australia decreased 13 cents to $48.90, Westpac closed down 2 cents to $21.20 and NAB gained 5 cents to $24.20. ANZ fell 4 cents to $22.53.

Macquarie Group decreased 5 cents to $27.97.

David Jones Limited closed on Friday at $2.73 and the stock is in halt for the second day ahead of a board vote on its strategic plan. The retailer is scheduled to release its half-year results and strategic plan on Wednesday.

Harvey Norman Holdings closed down 3 cents at $1.92 and Woolworths decreased 9 cents to $24.94.

Real estate developers edged higher and Westfield Group increased 7 cents to $8.75 and Stockland increased 4 cents to $3.15.

Qantas Airways Ltd closed down 2 cent at $1.75, Virgin Australia unchanged at 46 cents and Flight Centre decreased 17 cents to $21.63.