Australian Markets Rebound, Iron Ore Price Above $100

Marcus Jacob
12 Sep, 2012
New York City

Australian markets traded sharply higher and iron ore price jumped above $100 a ton. Mining companies gained after Chinese officials offered to increase stimulus if needed.

[R]8:30 PM Sydney – Australian markets traded sharply higher and iron ore price jumped above $100 a ton. Mining companies gained after Chinese officials offered to increase stimulus if needed.[/R]

Australian market indexes opened sharply higher after the apex court in Germany approved the legality of the euro zone’s rescue fund but set two conditions.

The decision paved the path to provide financial assistance to struggling nations in the euro zone and arrest the widening debt contagion.

The ruling also limits the German contribution to the present €190 billion and requires the fund to consult lawmakers before making any changes.

The ASX 200 index climbed 35.5 or 0.8% to 4,361.3 and the broader All Ordinaries gained 34.80 to 4,383.10.

The Australian dollar extended gains for the third day to US$1.046 after Chinese officials showed willingness to provide more stimulus if needed. Separately, iron prices also jumped to US$100.20 a ton from US$95 a ton in yesterday’s trading.

Stock Movers

BHP Billiton Limited jumped 27 cents to $32.85 and, Rio Tinto Limited climbed 56 cents to $55.09 and Fortescue Metals Group increased 10 cents to $3.47.

Separately, Jacqes Nasser told to a gathering of business executives in Melbourne today that the decision by the Queensland government to increase coal royalties to 12.5% from 10% was “unbelievable” and “counterproductive.”

However, he failed to explain how it will hurt the profits and why executive salaries at the company are at record high.

Lynas Corporation Limited gained 3.5 cents to 84.5 cents and Iluka Resources advanced 32 cents to $9.69.

Newcrest Mining declined 30 cents to $26.47; Kingsgate added 6 cents to $4.87 and Whitehaven Coal closed unchanged at $3.

Transfield Services slid 1 cent to $1.80 billion; engineering contractors WorleyParsons climbed 54 cents to $26.20 and Monadelphous Group jumped 39 cents to $19.89.

Oil Search Limited increased 15 cents to $7.69 and Santos Limited gained 12 cents to $11.77 and Woodside Petroleum slumped 17 cents to $34.50. Sundance Energy added 1 cent to 76 cents.

Seven West Media up 4 cents to $1.33, Ten Network slid 1 cent to 37 cents and Fairfax Media added 3 cents to 46.5 cents.

News Corp. increased 11 cents to $23.71 after Jamie Packer controlled Consolidated Media backed the revised takeover plan from the company.

Harvey Norman Holdings added 4 cents to $2.02, Woolworths down 1 cent to $28.94 and Kathmandu closed unchanged at $1.38.

Commonwealth Bank of Australia advanced 88 cents to $55.06 and Bank of Queensland gained 4 cents to $7.63. ANZ increased 10 cents to $24.20. National Australia Bank climbed 32 cents to $25.40 and Westpac Banking Corporation jumped 38 cents at $23.96.

Macquarie Group closed unchanged at $28.58 and Perpetual Limited advanced 46 cent to $26.81.

David Jones Ltd added 3 cents to $2.40 and Wesfarmers dropped 36 cents to $34.44. Billabong International Limited closed unchanged at $1.42. Breville Group gained 4 cents to $5.43. Harvey Norman increased 4 cents to $2.02.

Toll Holdings gained 3 cents to $4.61, Leighton climbed 42 cents to $15.14, and property developer Mirvac Group increased 2 cents at $1.43.

Qantas closed unchanged at $1.25, Flight Centre slumped 24 cents to $24.65 and Virgin Australia added 1 cent to 43 cents.

QR National closed unchanged at $3.44 and Telstra gained 3 cents to $3.83.