Australian Markets Plunge to 2-month Low, Dollar Slumps

Marcus Jacob
16 May, 2012
New York City

Australian stocks plunged as the index dropped the most in one day in six months and extended losses in the last two months. The dollar fell to the low of the year. BHP Chairman Jacque Nasser estimated commodities prices are expected fall further and the company may revise its 5-year investment plan of $80 billion.

[R]8:00 PM Sydney – Australian stocks plunged as the index dropped the most in one day in six months and extended losses in the last two months. The dollar fell to the low of the year. BHP Chairman Jacque Nasser estimated commodities prices are expected fall further and the company may revise its 5-year investment plan of $80 billion.[/R]

Australian shares plunged and the benchmark index declined the most since December 19 and the dollar closed at the low for the year.

The market extended losses of the last two months after BHP chairman said commodities prices are likely to cool further and the company may cuts its five year investment plan of $80 billion.

The ongoing turmoil in the euro zone also added to the market weakness and Greece failed to form a government after Greek president failed to form a consensus after six rounds of talks in the last ten days.

Greece is expected to go to a second election on June 10 or June 17 and voters are expected to send left leaning parties that favor the cancellation of bailout terms and resist new austerity measures larger representation.

The ASX 200 index plunged 100.80 or 2.4% to 4,165.50 and All Ordinaries index declined 101.59 or 2.3% to 4,214.68.

In stock trading, turnover increased to 2.2 billion shares worth $5.74 billion and 178 shares gained, 937 decreased and 312 closed unchanged.

The Australian dollar declined to the low for the year to 98.85 U.S. cents as commodities prices edge lower.

Stock Movers

Inustrea soared 43 cents to $1.23 after General Electric announced a $700 million friendly takeover of the mining equipment maker.

David Jones Limited slumped 10 cents to $2.26, Harvey Norman Holdings closed down at 7 cents to $1.97 and Woolworths slipped 21 cents to $27.

Myer slides 6 cents to $2.25 and Kathmandu fell 3 cents to $1.24. Billabong International Limited decreased 5 cents to $2.16.

Mining and resources linked companies traded sharply lower after material prices fell on the worries of a global slowdown.

BHP Billiton tumbled $1.37 to $32.49 after Chairman Jacque Nasser at a speech issued a cautious outlook and said commodities prices are likely to cool and five-year plan to invest $80 billion is likely to be trimmed.

Rio Tinto plunged $2.32 to $57.99

Lynas Corporation Limited slipped 6.5 cents to 92 cents and Iluka Resources slumped 27 cents to $13.08. Newcrest Mining declined $1.07 to $23.80 and Kingsgate slides 36 cents to $5.07.

Oil Search Limited decreased 12 cents to $6.71 and Santos Limited shrank 27 cents to $12.28. Orica declined 73 cents to $26.02.

Westpac Banking Corporation closed down at 22 cents to $22.68 and Commonwealth Bank of Australia tumbled 89 cents to $51.77. Bank of Queensland decreased 15 cents to $6.49. ANZ declined 50 cents to $21.61. National Australia Bank slumped 27 cents at $24.40.

Stockland decreased 9 cents to $3.23 and Leighton plunged 62 cents to $17.92. Toll Holding decreased 85 cents or 15% to $4.73 after the logistics group estimated weaker earnings on lower than expected demand from the struggling retail sector.

Qantas fell 5 cents to $1.48, Virgin Australia edged down 5 cents to 42.5 cents and Flight Centre shrank 62 cents to $18.51.

QR National decreased 10 cents to $3.34.