Australian Markets in 3-Day Slump, Iluka Plunges 24%

Marcus Jacob
09 Jul, 2012
New York City

Australian stocks closed lower for the third day in a row and the dollar traded near a record high against the euro. Leighton agreed to sell its waste management unit. Iluka Resources plunged the most in 25 years after it issued a cautious outlook.

[R]8:00 PM Sydney – Australian stocks closed lower for the third day in a row and the dollar traded near a record high against the euro. Leighton agreed to sell its waste management unit. Iluka Resources plunged after it issued a cautious outlook.[/R]

Australian stocks closed lower for the third day in a row following a weakness in Asian markets after China reported lower than expected inflation data.

The mood was cautious at the opening after U.S. reported weaker than expected net new jobs addition last month highlighting the halting and anemic economic recovery. In addition, finance ministers are scheduled to gather later in the day in Brussels to finalize the details of the Spanish banking bailout and may revise the terms of Greek loans.

The ASX 200 index decreased 39.50 to 4,118.30 and All Ordinaries index slipped 39.18 to 4,159.80.

The Australian dollar closed at US$1.018 and traded near the record high against the euro at 83.18 cents. The dollar surged to a record high against the euro on Friday as it staged a rebound against all major currencies last week.

In trading, turnover decreased to 1.07 billion shares worth $2.73 billion and 298 stocks rose, 600 decreased and 319 were unchanged.

Stock Movers

Billabong International Limited dropped 12 cents or 9.8% to $1.05 and gave up most of the Friday’s gains as takeover speculation ebbed.

Billabong plunged last month to as low as 96 cents from the high of $17 five years ago and $5 a year ago.

News Corp slid 4 cents to $21.81 and Ten Network fell 0.5 cents to 47.5 cents and Fairfax Media closed down 10 cents at 57.5 cents.

Resources stocks were lower on the worries that slowing economic growth in China may drag the demand for commodities and iron ore. China reported lower than expected inflation and investors looked ahead to the release of GDP data on Friday.

BHP Billiton Limited declined 61 cents to $31.48 and Rio Tinto Limited slumped $1.26 to $56.54. Fortescue Metals Group fell 5 cents to $4.83.

Iluka Resources plunged $2.82 or 24.1% to $8.88 after the largest zircon miner said in a statement filed with the ASX that the company is facing “marked deterioration” in major region economies and “more pessimistic forward outlook.”

Iluka dropped the most in a single day in twenty five years after the company’s warninh caught investors off guard.

Lynas Corporation Limited slid 5 cents to 80.5 cents, Newcrest Mining declined 69 cents to $23.44 and Kingsgate slipped 13 cents to $5.13.

Oil Search Limited decreased 17 cents to $6.51 and Santos Limited slid 11 cents to $10.58.

Metcash rose 5 cents to $3.24, Harvey Norman Holdings closed down 1 cent and Woolworths unchanged to $26.97. Kathmandu fell 2 cents to $1.16.

David Jones Limited closed down 6 cents to $2.40.

Commonwealth Bank of Australia declined 31 cents to $53.78 and Bank of Queensland decreased 12 cents to $6.67. ANZ slipped 8 cents to $22.50. National Australia Bank slumped 11 cents to $23.67 and Westpac Banking Corporation closed down 14 cents to $21.60.

Macquarie Group dropped 41 cents to $25.75 and Perpetual Limited increased 5 cents to $23.05.

Leighton gained 3 cents to $16.51 after the company began its sell off plan with the sale of its waste management unit for $218 million to Germany based Remondis AG.

The company is also looking for buyers for its telecom unit, stake in property company Devine and to resolve its ill fated venture in the Middle East.

Stockland added 2 cents to $3.11 and Toll Holdings slid 4 cents to $3.94.

Qantas fell 1 cent to $1.08, Virgin Australia edged down 0.5 cents at 38 cents and Flight Centre declined 22 cents to $20.28.

QR National slid 2 cents to $3.31.