Rio Tinto Production Decline Drags Australian Stocks

Marcus Jacob
17 Apr, 2012
New York City

Australian indexes traded lower after Rio Tinto reported sharply lower production at its copper and iron ore mines. Market sentiment was also weaker after China reported a decline in foreign direct investment.

[R]8:00 PM Sydney – Australian indexes traded lower after Rio Tinto reported sharply lower production at its copper and iron ore mines. Market sentiment was also weaker after China reported a decline in foreign direct investment.[/R]

Australian stocks declined after investors reacted to larger than expected decline in first quarter production at Rio Tinto. Market nerves were also frayed as Spanish bond yields rose to a record high and the euro zone debt worries persisted.

In addition, China said foreign direct investment in the first quarter declined 2.8% from a year ago.

The ASX 200 index decreased 13.50 to 4,288.80 and All Ordinaries index fell 13.66 to 4,368.82.

Australian dollar edged lower to $1.032 cents from $1.035.

In trading, stock turnover declined to 1.723 billion shares worth $3.69 billion and 362 shares gained, 587 declined and 398 closed unchanged.

Stock Movers

Rio Tinto was under pressure after iron production at mines it controlled and in joint ventures declined 11% to 45.6 million tons from 51.2 million tons in the quarter a year ago.

Copper production at five mines controlled by the company declined to 119,000 tons from 146,000 tons a year ago quarter and 137,000 tons in the previous quarter ending in December.

BHP Billiton decreased 16 cents to $34.15 and Rio Tinto declined 49 cents to $64.70 after the iron miner blamed weather for its recent production woes.

Lynas Corporation Limited closed up 5 cents to $1.15 and Iluka Resources dropped 52 cents to $16.54. Linc Energy fell 16 cents to $1.11 after the company announced a joint venture to explore gas in China.

Newcrest Mining slipped 10 cents to $28.35 and Kingsgate decreased 10 cents to $5.96.

Oil Search Limited fell 5 cents to $6.91. Woodside Petroleum dropped 22 cents to $33.98 and Santos Limited slumped 10 cents to $13.90.

David Jones Limited rose 3 cents to $2.2, Harvey Norman Holdings closed up 3 cents to $1.95 and Woolworths declined 21 cents to $25.54. Myer edged up 1 cent to $2.33 and Kathmandu closed up 1 cent at $1.31.

Billabong International Limited closed down 1 cent to $2.88.

Westpac Banking Corporation decreased 10 cents to $21.98 and Commonwealth Bank of Australia unchanged to close at $50.10. Bank of Queensland fell 7 cents to $6.96. ANZ declined 12 cents to $23.00 and Macquarie Group surged 59 cents to $29.12.

Real estate developers closed mixed Westfield Group slipped 8 cents to $8.87 and Stockland fell 2 cents to $2.94.

Qantas closed down 2 cents to $1.63, Virgin Australia rose 0.5 cents to 41.5 cents and Flight Centre fell 5 cents to $21.30.

QR National gained 2 cents to $3.61.