Australians Worry Iron Ore Price Decline

Marcus Jacob
27 Jul, 2012
New York City

Australian markets close higher as commodities advanced and the dollar gained a fraction. The spot price of iron ore declined for the second week in a row and dropped to a new low of $118 a ton and is likely to test the price level of $110.

[R]7:30 PM Sydney – Australian markets close higher as commodities advanced and the dollar gained a fraction. Iron prices declined for the second week in a row and dropped to the low of $118 a ton and is likely to test the price level of $110.[/R]

Australian stocks gained and on the hopes that the latest commitment to support the euro from the ECB may lead to additional purchase of Italian and Spanish bonds and help commodities prices to rebound.

The ASX 200 index gained 62.10 or 1.5% to 4,209.80 and All Ordinaries index increased 60.59 or 1.4% to 4,234.39.

For the week, the ASX 200 index increased 0.3% after rising 2.9% in the previous week.

The Australian dollar closed at US$1.033, edged higher to 85.10 euro cents, 66.8 pence and 80.89 yen.

In commodities trading, New York oil futures traded at US$90 a barrel and gold in the spot market fetched US$1,618.

In trading, turnover increased to 1.42 billion shares to $1.2 billion and 623 stocks gained, 286 declined and 321 were unchanged.

Stock Movers

Iron ore miners and resources stocks were in focus on the hopes that the latest commitment to support the euro from the ECB may support the prices of commodities. However, in the spot market iron ore prices declined for the second week in a row.

BHP Billiton Limited advanced 45 cents to $31.42 and, Rio Tinto Limited increased $1.49 to $52 and Fortescue Metals Group gained 15 cents to $4.15.

Iluka Resources soared 48 cents or 5.8% to $8.70, Lynas Corporation Limited closed down 3.5 cents to 75 cents, Newcrest Mining increased 77 cents to $23.14 and Kingsgate gained 7 cents to $4.39. Whitehaven Coal fell 4 cents to $3.71.

Caltex slipped 9 cents to $14.17 and the company said it will close its Kurnell oil refinery in Sydney and lay off 630 jobs.

Oil Search Limited gained 18 cents to $6.94, Santos Limited increased 16 cents to $10.68 and Woodside Petroleum added 10 cents to $33.09. Sundance Energy slid 1.5 cents to 41.5 cents.

Ten Network closed unchanged at 50 cents and Fairfax Media added 1 cent to 54 cents.

Metcash gained 7 cents to $3.30, Harvey Norman Holdings closed unchanged at $1.99 and Woolworths advanced 42 cents to $28.70. Kathmandu rose 2 cents to $1.16.

David Jones Limited added 4 cents to $2.40 and Wesfarmers increased 31 cents to $32.56. Billabong International Limited closed unchanged to $1.35.

Commonwealth Bank of Australia advanced 77 cents to $56.18 and Bank of Queensland gained 16 cents to $7.19. ANZ increased 42 cents to $23.08. National Australia Bank closed up 41 cents at $24.25 and Westpac Banking Corporation increased 39 cents to $23.

Macquarie Group gained 52 cents to $24.92 and Perpetual Limited advanced 72 cents to $23.39.

Leighton increased 41 cents to $16.64, Stockland rose 3 cents to $3.24 and Toll Holdings added 7 cents to $4.02.

Qantas closed unchanged at $1.09 cents after the airline confirmed it has been in discussions with Dubai based Emirates for a possible joint operating agreement.

Flight Centre gained 26 cents to $20.96 and Virgin Australia closed inched up 0.5 cent at 40.5 cents.

QR National rose 5 cents to $3.19.