Australian Indexes Track Lower Iron Ore Price, UGL Plunges 17%

Marcus Jacob
15 May, 2013
New York City

Australian indexes slipped after spot iron ore price declined in China and BHP highlighted restrained capital expenditure plan. Australian dollar traded at a new low for the year. UGL Limited plunged 17% on lowered earnings outlook.

[R]5:00 PM Sydney – Australian indexes slipped after spot iron ore price declined in China and BHP highlighted restrained capital expenditure plan. Australian dollar traded at a new low for the year. UGL Limited plunged 17% on lowered earnings outlook.[/R]

Australian stocks closed lower after indexes lost opening gains and drifted in the negative on weak resource prices.

Spot iron ore price at Tianjin port in China declined 1% to $128 a ton, the lowest in a week.

Investors looked overseas after Treasurer Wayne Swan reversed his earlier federal budget estimate to a deficit and resisted calls for more austerity measures.

In addition, BHP Billiton outlined its capital spending plan and said capital spending will decline for the first time this year since 2003 as the resource company braces for lower demand growth in China.

The ASX 200 index slipped 25.70 or 0.5% to 5,195.30 and the broader All Ordinaries dropped 29.20 to 5,173.30.

Australian dollar dropped to 98.9 cents against the U.S. dollar and in stock trading turnover jumped to 833 million worth $5 billion.

In the three months to March, the Australian wage price index grew 0.7%, according to the data released by the Australian Bureau of Statistics.

Stocks in Review

Rio Tinto declined $1.78 to $55.77 and BHP dropped 64 cents to $34.03.

Woodside Petroleum Limited rose 6 cents to $37.45.

David Jones Limited decreased 11 cents to $2.78 and Breville Group slipped 10 cents to $7. Woolworths declined 52 cents to $34.39.

Mirvac Group slid 2 cents to $1.77. Lend Lease slumped 25 cents to $11.

Westpac fell 8 cents to $31.67, Commonwealth increased 0.8% to $72.65 and National Australia Bank fell 0.1% to $33.07 and ANZ rose 0.3% to $29.98.

Commonwealth Bank of Australia gained 0.8% to $72.65 after the bank recorded profit in the third quarter of $1.9 billion.

Federation Centres Ltd slid 1 cent to $2.66 after first quarter sales increased 2.4% from annual sales growth of 2% in December.

SP AusNet, the Australia based electricity distributor rose 1 cent to $1.29 after net profit for the year climbed 9.5% to $279.1 million despite the slowdown in electricity distribution on higher prices.

UGL Limited plunged $1.63 or 17% to $7.94 after the diversified engineering company lowered profit outlook and expects full-year earnings in the range of $90 million to $100 million from earlier downwardly revised guidance of between $150 million and $160 million.