Australian Iron Ore Export Prices Fall Extends to Eighth Month

Marcus Jacob
24 Jul, 2012
New York City

Australian stocks rebounded after a private survey showed an increase in Chinese manufacturing activities in July. Export price of iron ore declined for the eighth month in a row. Billabong received another takeover offer at a reduced valuation.

[R]7:30 PM Sydney – Australian stocks rebounded after a private survey showed an increase in Chinese manufacturing activities in July. Export price of iron ore declined for the eighth month in a row. Billabong received another takeover offer at a reduced valuation.[/R]

Australian stocks traded lower after Moody’s lowered its rating views on the debts of three advanced nations in the euro zone.

Moody’s Investors Service lowered outlook on the AAA rated debts of Germany, Luxembourg and the Netherlands “negative” from “stable” and cited rising costs of bailouts in the region.

A private survey of Chinese manufacturing showed activities increased at the fastest pace in nine months in July. The HSBC Flash China manufacturing purchasing managers’ index or PMI rose to 49.5 in July from 48.2 in June.

However in trading, resource linked stocks were volatile after spot price of iron ore for exports to China declined for the eighth month in a row.

The data released by the Steel Index showed that the price of the benchmark iron ore price with 62% iron ore content declined 1.1% to US$123.60 a ton, the lowest since the first week in November.

The ASX 200 index edged up 4.30 to 4,133.20 and All Ordinaries index rose 2.03 to 4,161.20.

The Australian dollar closed at US$1.031 and edged lower from the record 85.20 euro cents and crude oil futures rose for the eighth straight session in New York and in Asian trading.

In trading, turnover increased to 1.59 billion shares to $3.19 billion and 342 stocks gained, 557 declined and 370 were unchanged.

Stock Movers

News Corp decreased 15 cents to $21.25 and British regulators brought criminal charges for two ex-editors of tabloid newspaper controlled by the company. Rupert Murdoch shuttered The News of the World tabloid after it was discovered that editors and reporters were engaged in phone hacking scandal and police corruption between 2000 and 2006.

Rupert Murdoch and his son James Murdoch have denied any knowledge of the scandal in testimony to British lawmakers. Eight individuals have been charged by British authorities.

Ten Network closed down 0.5 cent to 49.5 cents and Fairfax Media closed unchanged at 55 cents.

BHP Billiton Limited advanced 38 cents to $30.93 and traded near a 40-month low, Rio Tinto Limited increased 24 cents to $51.76 and Fortescue Metals Group fell 1 cent to $4.04.

Iluka Resources gained 6 cents to $8.20, Lynas Corporation Limited closed down 0.5 cents to 80.5 cents, Newcrest Mining increased 24 cents to $21.18 and Kingsgate slumped 6 cents to $4.68. Whitehaven Coal decreased 6 cent to $3.89.

Oil Search Limited rose 2 cents to $6.60 and said it is close to finalizing its partner for a natural gas project in Papua Guinea.

Santos Limited gained 8 cents to $10.32. Woodside Petroleum advanced 62 cents to $32.95.

Metcash added 2 cents to $3.22, Harvey Norman Holdings closed down 3 cents to $2.01 and Woolworths increased 24 cents to $28.13. Kathmandu fell 2 cents to $1.12.

David Jones Limited slipped 6 cents to $2.29. Telstra slid 3 cents to $3.86.

Billabong International Limited surged 22 cents or 19.6% to $1.32 after it received another takeover offer from a private equity group TPG that valued the surfwear retailer at $695 million.

Commonwealth Bank of Australia gained 4 cents to $54.78 and Bank of Queensland closed unchanged at $7.03. ANZ dropped 7 cents to $22.75. National Australia Bank fell 3 cents to $23.66 and Westpac Banking Corporation increased 7 cents to $22.62.

Macquarie Group slumped 16 cents to $24.30 and Perpetual Limited rose 2 cents to $23.05.

Leighton gained 5 cents to $15.97, Stockland added 1 cent to $3.20 and Toll Holdings slipped 8 cents to $3.83.

Alesco declined 2 cents to $2.01 after the garage doors and windows maker reported fiscal 2012 loss of $13.9 million.

Qantas closed down 3 cents to $1.0, Flight Centre declined 10 cents to $20.78 and Virgin Australia up 1.5 cents at 39 cents.

QR National fell 4 cents to $3.17.