BHP Billiton Earnings Worries, Australian Markets Gain

Marcus Jacob
02 Jul, 2012
New York City

Australian stocks and dollar extended gains for the second day in a row. Resource stocks were in focus as speculation grew that BHP may write-down recently acquired natural gas assets in the U.S. David Jones Dropped after the takeover offer lacked credibility.

[R]8:00 PM Sydney – Australian stocks and dollar extended gains for the second day in a row. Resource stocks were in focus as speculation grew that BHP may write-down recently acquired natural gas assets in the U.S. David Jones Dropped after the takeover offer lacked credibility.[/R]

Stocks in Sydney traded higher for the second day in a row on the hopes that the euro zone leaders will implement the region-wide banking authority and direct lending to banks will relieve pressures in the bonds of peripheral nations of the currency union.

Investors were cautious ahead of the earnings release from BHP Billiton on the worries that the company may be forced to write down recently acquired natural gas assets in the U.S.

The price of natural gas continues to trend lower and dragging with it the prices of coal and crude oil. Natural gas prices are trading at twelve year low.

The ASX 200 index gained 38.40 or 0.9% to 4,133.0 and All Ordinaries index rose 37.04 to 4,172.50.

The Australian dollar rebounded to US$1.026.

In trading, turnover increased to 1.48 billion shares worth $3.82 billion and 641 stocks increased, 306 declined and 317 were unchanged.

Stock Movers

Aristocrat Leisure dropped 31 cents or 11% to $2.45 after the company’s guidance of improved first half profit failed to meet investor’ expectations.

News Corp dropped 25 cents to $21.78, Ten Network fell 1 cent to 49.5 cents and Fairfax Media rose 3 cents to 58.5 cents.

BHP Billiton Limited increased 27 cents to $31.72 and Rio Tinto Limited added 1 cent to $56.51.

Altona Mining soared 19% to 29 cents after the company said Xstrata plans to exercise an option to acquire a part of Roseby copper and gold prospect.

Fortescue Metals Group down 4 cents to $4.86 and the founder Andrew Forrest acquired 6 million additional shares.

Lynas Corporation Limited added 1.5 cents to 86 cents and Iluka Resources decreased 7 cents to $11.25. Newcrest Mining advanced 93 cents to $23.54 and Kingsgate gained 26 cents to $5.11.

Oil Search Limited increased 7 cents to $6.65 and Santos Limited added 26 cents to $10.91 after the energy producer said the Gladstone liquefied natural gas project cost has increased 15% to $18.5 billion.

Metcash rose 6 cents to $3.43, Harvey Norman Holdings fell 2 cents to $1.93 and Woolworths increased 6 cents to $26.86. Kathmandu added 2 cents to $1.02. Billabong International Limited closed down 2 cents to $1.06.

David Jones Limited fell back 10% or 26 cents to $2.33 after the supposed takeover offer from an unknown private equity company based in the UK was found to lack credibility. The EB Private Equity, the bidder could not be traced or verified.

Commonwealth Bank of Australia advanced 43 cents to $53.53 and Bank of Queensland increased 7 cents to $6.69. ANZ gained 32 cents to $22.35. National Australia Bank increased 22 cents to $23.76 and Westpac Banking Corporation closed up 33 cents to $21.46. Macquarie Group advanced 80 cents to $26.80.

Perpetual Limited slumped 25 cents to $22.65.

Stockland increased 9 cents to $3.17, Leighton advanced 41 cents to $16.68 and Toll Holdings slid 6 cents to $3.92.

Qantas rose 2 cents to $1.10, Virgin Australia slipped 5 cents at 38.5 cents and Flight Centre gained 24 cents to $19.17.

QR National unchanged to $3.40.