Resource Stocks Power Australian Rally; Fortescue Halted

Marcus Jacob
14 Sep, 2012
New York City

Australian stocks closed at a 4-month high after a broad rally in resource stocks. U.S. Fed moved to offer a third round of stimulus with the help of printing new money that powered the latest rally in resource stocks. Fortescue was halted ahead of $9 billion debt restructuring.

[R]8:30 PM Sydney – Australian stocks closed at a 4-month high after a broad rally in resource stocks. U.S. Fed moved to offer a third round of stimulus with the help of printing new money that powered the latest rally in resource stocks. Fortescue was halted ahead of $9 billion debt restructuring.[/R]

Australian stocks closed at 4-month high after a broad surge in resource sector stocks sparked by the U.S. Federal Reserve.

The Fed offered third round of stimulus program to tackle chronic unemployment and also offered a tacit admission that its previous two programs have not been sufficient.

The latest round of money printing lifted prices of commodities and gold closes at a six-month high.

The ASX 200 index climbed 64.20 or 1.5% to 4,390 and the broader All Ordinaries gained 61.50 or 1.4% to 4,410.20. For the week, the ASX 200 index increased 1.5% and the All Ordinaries gained 1.4%.

In trading, stock turnover increased to 1.88 billion shares worth $4.67 billion and 661 stocks gained, 299 decreased and 375 were unchanged.

The Australian dollar increased to US$1.057 after the U.S. Federal Reserve announced third stimulus program.

Stock Movers

Fortescue Metals confirmed with the ASX that it is in negotiation with its lenders to restructure its $9 billion debt. Stock was halted after it fell 14% in yesterday’s trading.

BHP Billiton Limited advanced 53 cents to $33.31 and, Rio Tinto Limited jumped $1.53 to $56.58.

Lynas Corporation Limited gained 1.5 cents to 89.5 cents and Iluka Resources increased 39 cents to $10.30.

Newcrest Mining surged $1.93 or 7.3% to $28.36; Kingsgate soared 48 cents or 9.9% to $5.33 and Whitehaven Coal climbed 20 cents or 6.8% to $3.16.

Transfield Services advanced 7 cent or 4.4% to $1.78 billion; engineering contractors WorleyParsons increased $1.05 or 4% to $27.30 and Monadelphous Group advanced 41 cents to $20.04.

Oil Search Limited gained 12 cents to $7.75 and Santos Limited climbed 17 cents to $11.95 and Woodside Petroleum jumped 35 cents to $34.86. Sundance Energy closed unchanged at 75 cents.

Seven West Media down 1 cent to $1.32, Ten Network closed unchanged at 36 cents and Fairfax Media added 1 cent to 48 cents and the controversial News Corp. inched up 1 cent to $23.53.

Myer added 2 cents to $1.85 after the department store retailer full-year to June earnings declined 14.3% to $139.3 million and sales dropped 1.3% to $3.1 billion.

Harvey Norman Holdings lowered 1 cent to $1.99, Woolworths slid 4 cents to $28.86 and Kathmandu closed unchanged at $1.40.

Commonwealth Bank of Australia climbed 26 cents to $55.28 and Bank of Queensland increased 5 cents to $7.75. ANZ gained 9 cents to $24.23. National Australia Bank added 13 cents to $25.41 and Westpac Banking Corporation advanced 31 cents at $24.11.

Macquarie Group jumped 71 cents to $28.96 and Perpetual Limited increased $1.07 or 4% to $27.60.

David Jones Limited slipped 5 cents to $2.30 and Wesfarmers climbed 55 cents to $34.55. Billabong International Limited added 2 cents to $1.45. Breville Group slumped 15 cents to $5.28. Harvey Norman slid 1 cent to $1.99.

Toll Holdings gained 5 cents to $4.67, Leighton jumped 71 cents or 4.7% to $15.73, and property developer Mirvac Group increased 2 cents at $1.45.

Qantas closed unchanged at $1.24; Flight Centre increased 27 cents to $25 and Virgin Australia up 0.5 cents to 43 cents.

QR National added 2 cents to $3.42 and Telstra slipped 3 cents to $3.82.